The International Foundation for Research in Experimental Economics (IFREE) was inspired originally by Mary Caslin Ross and the work of Dr. Vernon L. Smith to support research and education in experimental economics. Today, IFREE remains the only foundation annually supporting research projects, graduate and post-doctoral education, seminars and outreach workshops in experimental economics, and the application of experimental economic methodology to important public policy questions.
IFREE Mission Statement
To advance the understanding of exchange systems and the testing and application of market-based institutions:
- By funding basic research in economics through experimental methods,
- By sponsoring innovative hands-on participatory learning in experimental economics in a variety of settings,
- By supporting ithe scholarly development of students and pre- and post-doctoral visitors, and
- By promoting extended discussion of experimental economics research applications to policy.
Bart Wilson debriefing a double oral auction at a high school workshop in experimental economics.
Principles of Belief that Undergird IFREE-funded Research and Education
- Decentralized knowledge and efficient coordination require free choice among individuals governed by rules respecting limited resources and constrained by the freedom of choice of others.
- "Know-how" knowledge in society is dispersed across individuals in all social systems.
- Diversity of preferences, knowledge, and skills is the hallmark of all markets and social systems.
- Free choice allows human social systems to explore and discover the opportunities through which all can achieve increasing gains from exchange through the specialization enabled by exchange.
- Personal and impersonal exchange systems that have co-evolved with knowledge/skill specialization are the only known engines of wealth creation. Market experiments enable us to better understand how institutions matter because the rules matter, and how rules matter because incentives matter.
- Personal social exchange systems importantly complement market exchange systems. Both share the ancient principle of mutual giving and receiving, but are differently expressed as reciprocity in social exchange, and property rights supported by the rule of law in market exchange.
- Product and service markets are far more effective than standard economic theory predicts. In both laboratory market experiments, and in the development of new field applications, dispersed private information is sufficient for rule-guided action. The important research question is how should the rules vary with circumstances?
- Markets can be structured so that they are self-regulating and self-ordering to create new long term value, but the structure of (property) rights to take action must honor technical features that vary across different industries and physical environments. This requires "test bedding" (try it before you fly it) in both the laboratory and the field to understand new applications.
- Markets, most importantly, constitute discovery processes.