Vernon Smith’s Insomnia and the Dawn of Economics as Experimental Science

If asked to produce a list of current economists whose work will most influence the development of economics over the next 50 years, I would put Vernon Smith’s name close to the top. As Smith (1987) once remarked, economics has been traditionally considered an ‘‘observational’’ science like astronomy or meteorology, rather than an experimental science like physics or chemistry. The great accomplishment of Smith and his fellow experimentalists has been to convince the economics profession that economics can be an experimental science. A wide range of previously ‘‘untestable’’ propositions in economics become subject to empirical investigation once we realize that controlled laboratory experiments are possible. This has drastic implications for the attitude that we bring to our discipline. Smith (1989) describes this change: