Behavioral Political Economy (BPE) uses laboratory experiments to study political and economic institutions. BPE is an empirical discipline that studies the actual behavior of people within institutions as opposed to traditional approaches relying on assumptions about rational actors. BPE experiments commonly use monetary incentives to recreate the incentive structure of a real-world problem such as bargaining over a price, finding trading partners, or making collective decisions. Often, experimenters vary the institutions that shape how people interact and communicate such as manipulating whether people can establish reputations, the bidding rules for an auction, or the voting rules for choosing policies. This allows researchers to generate, test, and refine hypotheses about the effects of institutions. In turn, a better understanding of institutions can help guide people toward socially optimal behavior and, more deeply, can help explain the core political and economic institutions that govern human societies. To this end, many CBPE researchers investigate the causes and consequences of “pro-social” preferences and behaviors such as altruism, fairness and inequality aversion. Last, the empirical orientation of BPE brings it into close proximity with the field of psychology, including social, political, evolutionary, and cognitive psychology. The effects of institutions ultimately depend on the structure of the human mind and BPE can leverage modern psychological theories (rather than rationality assumptions) to motivate the study of institutions.
Our Center and Decision Experiment Laboratory
The CBPE includes a state-of-the art Decision Experiment Laboratory that is specially designed for studying political and economic institutions. The lab is outfitted with a network of 30 computers for observing participants’ behavior in a variety of political and economic settings. Lab experiments customarily use monetary incentives and the lab disallows deception to ensure that participants’ behaviors result from the stated linkage between the choices and the payments in the experiment. Experimenters generally use custom software on the network to recreate social problems such as contributing to a public good, disputing over resources, forming political alliances, or making collective decisions. CBPE researchers are engaged in active collaborations with researchers at other institutions within the U.S. and around the world. In addition to lab experiments, CBPE researchers routinely conduct online experiments and observational studies that relate to BPE issues.
The CBPE is also an intellectual center for bringing together researchers from diverse fields who use experimentation to understand political and economic institutions. This includes Stony Brook researchers from Political Science, Economics, Business, and other departments. Additionally, through small conferences and guest speakers we will connect with intellectual communities around the world.