Vernon L Smith High School Workshops in Experimental Economics

Exciting NEWS: This year’s Vernon L. Smith High School Workshops at Chapman University are being sponsored by a generous grant to IFREE by the Thomas W. Smith Foundation!

Pictures of the 2011 workshops

The Vernon L. Smith High School Workshops in Experimental Economics at Chapman University are designed to introduce high school students to the study of economics using laboratory methods. Two week-long workshops will be offered July 25th-29th and August 1st-5th, 2011. Each workshop will be open to local southern California commuters and traveling participants, and students earn cash daily from participating in experiments. A limited number of travel scholarships have been made available for students who are not from southern California. For information and how to apply for these workshops, please visit: http://chapman.edu/ESI/workshops/HS_ExpEcon.asp

Since 1997, the Vernon L. Smith High School Workshop program in Experimental Economics has offered students the opportunity to approach economics from a perspective that is at once modern and traditional. Students are treated to hands-on demonstrations of economic dynamics in the form of innovative economic experiments that leverage the latest in computer technology to immerse participants in the environments and institutions that are merely described in textbooks and traditional lectures.

Each day of the workshop is broken into three primary components: experiment, debriefing lecture and discussion, and group coursework that allows student to further explore the implications of the economic principles described. The week begins by establishing the distinction between impersonal and personal exchange. Impersonal Exchange is explored through several experiments including the oral double auction, an experiment illustrating the concept of comparative advantage and exchange, the asset market bubble experiment, and several single seller auctions.

Particular emphasis is placed on the power of markets as aggregators of information and the price system as a means of coordinating the allocation of goods consumed and the distribution of the means of production. (The works of Friedrich Hayek figure prominently in lectures with passages from his seminal paper, “The Use of Knowledge in Society,” and his book, Law, Legislation, and Liberty providing a unique intellectual context for interpreting the results of market experiments.)

Hayek also provides the backdrop for the discussion of Vernon Smith’s asset market experiment where macroeconomic effects of price distortions take center stage. For most students, the concept of a market bubble is distant and abstract. This experiment puts students in the position of creating a bubble and illustrates Hayek’s concern that the signaling function of prices in markets results in bubbles that can cause material harm to an economy through misallocation of resources.

Midweek, the workshop transitions from a focus on impersonal markets to an exploration of personal exchange. A particular emphasis is placed on collective action problems with student participation in two-person normal and extensive form games, the voluntary contributions mechanism, and the common pool resource experiment providing a hands-on demonstration of the dynamics described in Adam Smith’s Theory of Moral Sentiments. A particular focus is placed on the conception of morality as being dependent upon the capacity of human beings for both empathy and reciprocity. With this historical context, students explore modern advances in psychology and anthropology that confirm the relevance of Smith’s observations using the latest in scientific methods.

Students leave the workshop with a far richer understanding of the broad reach of modern economic methods and the historical context in which new research proceeds today. Even students who have already been exposed to traditional courses in economics leave the workshop with a new appreciation of the power of economic ideas, old and new, to help us make sense of our own lives and the lives of others.

Pictures of the 2010 Workshop
Vernon L. Smith High School Workshop in the news, July 28, 2010.
Recap of the 2009 Summer Workshop