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The role of experiments for policy design

Peter Werner and Arno Riedl

No 22, Research Memorandum from Maastricht University, Graduate School of Business and Economics (GSBE)

Abstract: In this paper, we review selected evidence to demonstrate the value of experiments for policy design with a focus on environmental policy and tax policy. Experiments can substantially improve ex-ante predictions about the outcomes of policy interventions, for example, by serving as “testbeds” to compare alternative market rules and mechanisms under tightly controlled conditions. Experiments also yield important insights into systematic deviations from strict rationality and into the heterogeneity of preferences among decision-makers that can form the basis for the (re-) design of policies. Besides describing various experimental approaches applied in the areas of environmental policy and tax policy, we also discuss further directions for successful collaborations between experimental economists and political decision-makers.

Keywords: experiments; policy design; policy evaluation; behavioral regularities; non-standard preferences; environmental policy; tax policy (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-env and nep-exp
Date: 2018-08-27
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