PhD Workshop: Experimental Economics
2025-26 Term 2

The topics for this course change every year.
The first part is during term 1 and is taught by Michael Thaler; I cover the second part in term 2.

In this course, we will discuss an overview of several topics in experimental economics. The goal is not to cover all the active research, but to get students a background of experimental economics, and to get to the frontier on a selection of topics. Each year the topics change, with the goal that most of the material will be new for students who have previously taken the course.

This year, I will be focusing on experiments related to fundamental aspects of strategic interaction; I describe the topics I cover in more detail below.

Course Description

How do people reason, form beliefs, and learn in strategic environments? While it is oftentimes assumed that individuals best respond to well-defined beliefs and that play is well captured by equilibrium predictions, a large experimental literature instead documents systematic departures: behaviour denotes limited depth of reasoning, players hold imperfect or unstable beliefs about others, make errors that vary systematically with incentives, and exhibit learning dynamics that do not reliably converge to Nash outcomes.

This course takes a deliberately positive approach. The objective is to document robust behavioural patterns in experiments and to evaluate which models can account for those patterns, inspiring applications of the insights developed as well as novel experimental and theoretical investigations. Across the course we focus on how to measure and explain limited depth of reasoning and heterogeneity in strategic sophistication; how and why to elicit beliefs; how incentives shape both choices and beliefs, including through systematic patterns of mistakes; what decision-time data can (and cannot) tell us about the mechanisms generating play; and where learning dynamics conduce behaviour.

A central feature of the course is a hands-on methodological component. Students will repeatedly move from behavioural question to model-based prediction, from prediction to experimental design, and from design to implementation and analysis. The practical work emphasises identification and clean experimental variation. We will also develop reusable experimental code for canonical strategic settings, belief elicitation, and process-data collection.

While the course is grounded in experimental and behavioural game theory, its questions and tools are relevant for all fields in economics and beyond. The questions and findings we discuss speak directly to settings in which agents respond strategically to incentives, information, and institutions. They can help discipline interpretations of trading and portfolio rebalancing when small investors hold limited and heterogeneous sophistication, inform models of expectations and policy credibility when households and firms fail to anticipate others' reactions to inflation or policy regimes, and sharpen empirical work in IO where strategic interaction, limited sophistication, and error are central to demand, pricing, and entry dynamics. More broadly, the course highlights why these behavioural regularities matter for both policy and theory: if individuals misperceive others' responses, are overly sensitive to incentives, or learn in systematically biased ways, then welfare analysis and institutional evaluation must take these patterns into account rather than assuming them away.

Meeting Times and Location
Tuesday, 9:00-11:00. Drayton House, B03 Ricardo LT.
Meeting Dates: 13 January – 17 March 2026.

Topics

1. Introduction. Limited Depth of Reasoning.
   Lecture(s): 13 and 20 January.
   Slides 1. Handouts 1. Slides 2. Handouts 2.
2. Beliefs about Others.
   Lecture(s): 27 January.
   Slides. Handouts.
3. Reacting to Incentives.
   Lecture(s): 3 February.
4. Coding Experiments.
   Lecture(s): 10 and 17 February.
5. Decision Time in Strategic Settings.
   Lecture(s): 24 February.
6. Learning in Games.
   Lecture(s): 3 March.
7. Project Presentations.
   Lecture(s): 10 and 17 March.

Materials will be posted below as the course progresses.

Paper Presentations
Most weeks, every member of the class will be required to work in a group of at most 3 people to prepare a 15 minute presentation on an assigned paper. One group will be selected at random to give the presentation at the start of the class.

• 20 January: Fudenberg and Liang (2019 AER) Predicting and Understanding Initial Play or Rasooly (2023 JPEMicro) Going... Going... Wrong: A Test of the Level-k (and Cognitive-Hierarchy) Models of Bidding Behavior.
• 27 January: Koessler, Noussair, and Ziegelmeyer (2012 JEBO) Information aggregation and belief elicitation in experimental parimutuel betting markets or Polonio and Coricelli (2019 GEB) Testing the level of consistency between choices and beliefs in games using eye-tracking.
• 3 February: Heinemann, Nagel, and Ockenfels (2009 REStud) Measuring Strategic Uncertainty in Coordination Games or Frydman and Nunnari (2025) Coordination with Cognitive Noise.
• 10 February: Goeree and Holt (2001 AER) Ten Little Treasures of Game Theory and Ten Intuitive Contradictions.
• 17 February: Snowberg and Yariv (2021 AER) Testing the waters: Behavior across participant pools or Gupta, Rigotti, and Wilson (2023) The Experimenters' Dilemma. Inferential Preferences over Populations.
• 24 February: Ali, Mihm, Siga, and Tergiman (2021 AER) Adverse and Advantageous Selection in the Laboratory or Dal Bó, Dal Bó, and Eyster (2018 REStud) The demand for bad policy when voters underappreciate equilibrium effects.
• 3 March: Gill and Prowse (2023 EJ) Strategic Complexity and the Value of Thinking or Selten and Chmura (2008 AER) Stationary Concepts for Experimental 2x2-Games.

Project Presentations
The project presentations are to be structured as follows: 15min project idea (motivation, model sketch, hypotheses, identification strategy, target results); 5min discussion. Please send me an email by 27 January with your group composition (1 to 3 people) and your tentative topic.