Arizona and E-Commerce in the Laboratory

Abstract

Arriving in Tucson amidst the summer monsoon wind, rain, and lightning, I enroll a small assorted and assertive mix of undergraduate and graduate students ranging from engineering to economics to see what we can learn together from the pursuit of new projects to be defined in-process. I put them through a few of the standard “hand-run” experiments to give them experience from the subject’s perspective, and we read a couple of my first papers. It was early in the semester when Mike Vannoni, an engineering undergraduate, asked if I knew of the PLATO teaching computer system in the library. No, I did not. Mike said that he thought it could be used to run our interactive economics experiments. We checked with the physics professor in charge and the class agreed that this had great potential. We soon all had ideas, projects, and energy for the semester. Without it being any part of our intentions, we were defining a new future for experimental economics and more remarkably, for economic science generally. Several students learned PLATO programming to run the first market and group decision experiments in the laboratory; several enrolled in follow-on special studies courses to continue their projects. Arlington Williams created the first-in-the-world electronic bid-ask double auction trading system, in operation and under continuous development for decades. That class alone produced several joint publications exploring the performance of a variety of auctions, trading, and public good provision mechanisms. For 26 exciting years, we built large on the original Purdue Foundation, a glorious second Camelot for me and many students and faculty.