Started as an alternate, more hands-on method to economic education, the Economic Science Institute at Chapman University is an academic center that uses the laboratory method of inquiry to study the role human institutions play in creating social rules and order, and also builds and tests market and management systems. ESI’s research spans the fields of accounting, economics, finance, information systems, engineering, psychology, neuroscience, computer science and philosophy.
Traditionally, economists relied heavily on mathematical abstractions to understand how people behave and how markets work. But Vernon L. Smith recognized that markets in natural environments are dynamic and operate in specialized institutional settings. He began laboratory work to determine if those mathematical abstractions actually described market behavior and whether they could be tested using a scientific approach.
This method has become known as Experimental Economics and earned Smith the honor of Nobel laureate and Chapman the honor of having a distinguished institute working at the frontiers of economic science.