Professor Vernon L. Smith pioneered the field of experimental economics nearly 50 years ago. He was awarded the Nobel Prize for Economics in 2002 for his contributions to the economic sciences.
Before 1956, when Dr. Smith completed his first experiment, economic theory assumed markets are efficient only with a large number of buyers and sellers. Experimental methods were the first to test such theories. These tests have demonstrated markets can be efficient even with very few participants and additionally revealed that market efficiency depends crucially on the institutions that govern markets - "rules of the game" that affect both individual behavior and overall market outcomes.
Results of experiments have given economists a deeper understanding of the actual workings of real-world markets and the institutions, and have helped guide public policy in the design and testing of a pollution permit trading system, and electric power and water markets.
Dr. Smith is the founder and research scholar at the Interdisciplinary Center for Economic Science (ICES), a distinguished fellow of the American Economic Association, and a fellow at the American Academy of Arts and Sciences; he was elected a member of the National Academy of Sciences in 1995. He currently serves on the Board of Directors of the International Foundation for Research in Experimental Economics, an adjunct scholar at the Cato Institute, and is a research fellow and board member of the Mercatus Center. In 2001, due to a generous gift from the Charles G. Koch Foundation, Dr. Smith and his ICES colleagues relocated to George Mason University.
He received a bachelor's degree in Electrical Engineering from the California Institute of Technology and his Ph.D. in Economics from Harvard University. He has authored or co-authored more than 12 books and 250 articles on capital theory, finance, natural resource economics and experimental economics.
For more information on Smith, see the ICES website.
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