Contribution to Book
This paper draws attention to the increased use of Adam Smith’s work in the experimental economics literature. It also offers examples of how studying Adam Smith can help formulate possible answers to some otherwise counter-intuitive (if the intuition is based on the Rational-Choice paradigm) experimental results. The first part of the paper presents a short account of how, in recent years, the field has come to recognize the importance of considering other-regarding preferences as well as self-regarding preferences and how it is noticing the wealth of Adam Smith, who dealt with both. The central section of the paper offers examples of how the Smithian apparatus can provide plausible explanatory stories for data from experimental games such as, but not limited to, the Ultimatum Game, the Dictator Game and the Trust Game, which usually cannot be explained using only strict Rational Choice. Smithian resentment, love of praiseworthiness and dread of blameworthiness on the other hand seem to be plausible explanations for the seemingly irrational punishment and generosity observed in these experimental games. Concluding remarks end the essay.
Jeffrey T. Young
Paganelli, M. P. (2009). Smithian Answers to Some Experimental Puzzles. In J. T. Young (Ed.), Elgar Companion to Adam Smith (pp. 181-192). Cheltenham, United Kingdom: Edward Elgar.
Elgar Companion to Adam Smith