Chair of Experimental Economics
Prof. Dr. Henrik Orzen
Henrik Orzen is Professor of Economics at the University of Mannheim. He received his doctoral degree in 2003 from the University of Nottingham and subsequently worked there in various roles, initially as a postdoctoral research fellow, then as a lecturer and finally as an associate professor. In 2009 he joined the University of Mannheim. He is the director of the Mannheim Laboratory of Experimental Economics (mLab).
Henrik's main research interests are in experimental economics, applied game theory and industrial organization. He has published his work in a number of peer-reviewed academic journals, including the American Economic Review, Games and Economic Behavior, the International Journal of Industrial Organization and the European Economic Review. He is also an External Fellow of the Nottingham-based Centre for Decision Research and Experimental Economics (CeDEx).
Experimental economics
What is experimental economics?
Experimental economics is perhaps the most exciting methodological innovation in economics in recent times. Economists conduct experiments for the same reason physicists or chemists do: To very carefully study something under controlled and clean laboratory conditions. The only difference is that the subject matter is not a subatomic particle or a chemical substance but human decision making behavior. Hence, experimental economists confront people with decision problems and then observe what they do. Importantly, these tasks are not hypothetical: The choices that the subject volunteers make have real pecuniary consequences for them; there is real money on the table.
In experimental economics a wide range of choice problems is considered, inspired by fundamental economic questions. For example: How do people choose when they face situations characterized by ‘risk’ where very good or very undesirable outcomes may occur? Under what circumstances and to what extent do concerns for fairness or status affect economic decisions? What exactly are these concerns about and how robust are they? To what extent and in what ways do people reason strategically? How do you get a competitive market? What are the most likely outcomes in different bargaining situations? The experimental approach has turned out to be a very successful tool to improve our understanding of such issues.
Experiments enable researchers to do things that are difficult to achieve with traditional analyses of field data. For example, they can explore counterfactuals (“what would happen if…”), evaluate precisely how close actual outcomes (e.g. observed prices) are to desirable outcomes (e.g. efficient prices), and they can separate cause and effect. In this way experimental economics complements field data research and has become an important source of information for improving economic theories. Sometimes, economists even run field experiments in an attempt to combine advantages of field and laboratory research.
Experimental research can partly also be put to direct practical use as it allows economists and decision makers in firms and organizations to examine the likely consequences of new rules and regulations before these are implemented in practice. Examples for these kinds of ‘wind tunnel’ experiments include the design of markets, better rules for allocating scarce resources, effective incentive schemes, novel formats for auctions and voting mechanisms or the development of more successful mechanisms to collect contributions for charitable purposes.
But the most significant and intriguing contributions of experimental economics relate to elementary questions about the very foundations of economic theory. Experiments make it possible to examine and scrutinize very rigorously the true nature of how people make decisions in economic contexts. As it turns out some of the findings from experimental research are not always convenient for economists. For instance, they raise serious questions about the legitimacy of the traditional homo economicus assumption, even as a rough approximation of actual behavior. Over the years this has already triggered an ongoing gradual shift in the way economic models are constructed and justified. A debate has begun regarding the question whether economic models should routinely incorporate more empirically sound assumptions. In this way experimental research has contributed to an exciting renewal of the entire field of economics.
Interested? The Department of Economics at the University of Mannheim offers various courses in experimental and behavioral economics at the bachelor and master level. Furthermore, the department runs a dedicated research lab in which experimental studies are conducted regularly: mLab.
Experimentelle Wirtschaftsforschung
Die experimentelle Ökonomik ist vielleicht die aufregendste methodische Innovation in den Wirtschaftswissenschaften in jüngerer Zeit. Volkswirte führen Experimente aus dem gleichen Grund durch, aus dem Physiker oder Chemiker dies tun: Um etwas sehr sorgfältig unter kontrollierten und sauberen Laborbedingungen zu erforschen. Der einzige Unterschied ist, dass der Gegenstand der Untersuchung nicht ein subatomares Teilchen oder eine chemische Substanz ist, sondern menschliches Entscheidungsverhalten. Experimentalökonomen stellen Versuchspersonen also vor Entscheidungsprobleme und beobachten dann, was sie tun. Wichtig dabei ist, dass die Entscheidungen, die die Teilnehmer fällen, reale monetäre Konsequenzen für sie haben; es geht also um echtes Geld.
In der experimentellen Wirtschaftsforschung betrachtet man ein breites Spektrum an Entscheidungssituationen, die durch ganz grundlegende wirtschaftswissenschaftliche Fragen motiviert sind. Zum Beispiel: Wie verhalten Menschen sich, wenn sie mit „Risiko“-Situationen konfrontiert sind, in denen besonders gute, aber auch sehr ungünstige Ergebnisse möglich sind? Unter welchen Umständen und in welchem Ausmaß beeinflusst das Streben nach Fairness oder Status wirtschaftliche Entscheidungen? Worum genau geht es den Leuten dabei, und wie robust ist das? Inwieweit und in welcher Weise verhalten Menschen sich strategisch? Welche Faktoren bestimmen die Wettbewerbsintensität von Märkten? Was sind die wahrscheinlichsten Ergebnisse in unterschiedlichen Verhandlungssituationen? Der experimentelle Ansatz hat sich als sehr erfolgreich erwiesen, um unser Verständnis hinsichtlich solcher Fragen zu verbessern.
Der experimentelle Ansatz ermöglicht es Forschern, Dinge zu tun, die mit der herkömmlichen Analyse von Felddaten schwierig zu erreichen sind. Zum Beispiel kann man Kontrafaktisches erkunden („Was würde passieren, wenn ...“), man kann quantifizieren, wie nah tatsächliche Ergebnisse (z. B. beobachtete Preise) und wünschenswerte Ergebnisse (z. B. effiziente Preise) beieinanderliegen, und man kann Ursache und Wirkung separieren. Auf diese Weise ergänzen Laborexperimente Felddaten-Untersuchungen und haben sich als wichtige Informationsquelle erwiesen, um ökonomische Theorien zu verbessern. Gelegentlich führen Volkswirte auch Feldexperimente durch. Dahinter steckt der Versuch, die Vorteile der Feld- und Laborforschung miteinander zu kombinieren.
Experimentelle Forschung hat teilweise auch direkten praktischen Nutzen, denn sie ermöglicht es Ökonomen und Entscheidern in Firmen und Organisationen, die wahrscheinlichen Folgen neuer Regeln abzuschätzen, bevor diese in die Praxis umgesetzt werden. Beispiele für diese Art von „Windkanal“-Experimenten sind das Design neuer Märkte, bessere Regeln für die Allokation knapper Ressourcen, effektive Anreizsysteme, neue Formate für Auktionen und Abstimmungsregeln oder sogar die Entwicklung wirkungsvollerer Mechanismen, um Spenden für gemeinnützige Zwecke einzuwerben.
In den bedeutendsten und faszinierendsten Beiträgen zur experimentellen Ökonomik geht es jedoch um elementare Fragen hinsichtlich der Grundpfeiler ökonomischer Theoriegebäude. Experimente erlauben es uns, sehr präzise zu untersuchen und zu hinterfragen, wie Menschen Entscheidungen in wirtschaftlichen Kontexten fällen. Wie sich dabei auch zeigt, sind manche der Befunde aus der experimentellen Forschung durchaus unbequem für Wirtschaftswissenschaftler. Sie werfen z. B. ernste Fragen hinsichtlich der Legitimität des traditionellen Konzepts des „Homo Oeconomicus“ auf, selbst als grobe Approximation von tatsächlichem Verhalten. Über die Jahre hat dies bereits teilweise zu einer schrittweisen Veränderung geführt in der Art und Weise, wie volkswirtschaftliche Modelle konstruiert und gerechtfertigt werden. Es gibt eine Debatte darüber, in welchem Ausmaß Modelle auf empirisch besser fundierten Annahmen fußen sollen. Auf diese Weise hat mithilfe der experimentellen Forschung eine spannende Erneuerung der Volkswirtschaftslehre eingesetzt.
Interessiert? Die Abteilung VWL an der Universität Mannheim bietet in ihren Bachelor- und Masterprogrammen verschiedene Kurse zur experimentellen Wirtschaftsforschung und verhaltensorientierter Ökonomik an. Darüber hinaus betreibt die Abteilung ein eigenes Forschungslabor, in dem regelmäßig experimentelle Studien durchgeführt werden: mLab.
Teaching (current semester)
Competition under the microscope – Spring 2023
Lecturer: Prof. Dr. Henrik Orzen
This lecture takes a closer look at fundamental principles of competition in markets, contests and auctions. The focus will be on game-theoretical models that describe various competitive settings and deliver predictions, and on experiments that implement such settings in the laboratory and then investigate behavior as well as outcomes under controlled conditions, testing the theoretical predictions. Topics will include output and pricing strategies, collusion, market structure, market entry decisions, contests and auctions. There will also be a brief introduction to the role and use of experimental methods in economics more generally. Furthermore, to facilitate learning and a better feel for different situations characterized by competition students will participate in several experiments themselves.
E878 Advanced PhD Seminar in Experimental Economics – Spring 2023
Seminar convenor: Prof. Dr. Henrik Orzen
In this seminar participants present and discuss their current research as well as ideas for future research. If you are interested in the seminar, please contact Prof. Orzen by email.
Teaching (former semesters)
BE 510 Business Economics 1 – Autumn 2020
Lecturer: Prof. Dr. Henrik Orzen
This module will start with a brief review of standard models of choice, including choice under risk, and then move on to an extended introduction to non-cooperative game theory. Strategic decision making and relevant solution concepts for games of complete and incomplete information will be covered in detail. The course will close with a discussion of basic notions in the economics of information. An important aim is to convey an understanding and a working analytical knowledge of how economists model decision making.
Remarks:
- This one-semester module is available only to students on the Mannheim Master in Management (MMM) program.
- There are no formal prerequisites but it will be assumed that participants are familiar with introductory microeconomics at bachelor level.
- The module is offered in two parallel, identical streams of weekly sessions. In addition students attend weekly problem classes.
- Lectures and problem classes will be held in English.
Downloads: Module materials are available on ILIAS.
Exam script viewing: The exam script viewing will take place after the grades of the resit exam have been published about mid March. If you wish to look at your script, please send an email to our office (Mrs Pipphardt) to arrange this by using your official university email address. Further information will be given on ILIAS.
E 801: Advanced Microeconomics II – Spring 2019
Lecturer: Prof. Ph. D. Emanuele Tarantino, Prof. Ph. D. Nicolas Schutz, Prof. Dr. Henrik Orzen
The first part of the course (Tarantino) is devoted to the study of dynamic games.
The second part of the course (Schutz) provides an introduction to the theory of repeated games.
The third partof the course (Orzen) covers selected topics in behavioral and experimental economics.
E878 Advanced PhD Seminar in Experimental Economics – Spring 2019
Seminar convenor: Prof. Dr. Henrik Orzen
In this seminar participants present and discuss their current research as well as ideas for future research. If you are interested in the seminar, please contact Prof. Orzen by email.
BE 510 Business Economics 1 – Autumn 2018
Lecturer: Prof. Dr. Henrik Orzen
Problem classes: Mr Esteban Cattaneo, Ms Anh Thi Dam und Mr Vahe Krrikyan
This module will start with a brief review of standard models of choice, including choice under risk, and then move on to an extended introduction to non-cooperative game theory. Strategic decision making and relevant solution concepts for games of complete and incomplete information will be covered in detail. The course will close with a discussion of basic notions in the economics of information. An important aim is to convey an understanding and a working analytical knowledge of how economists model decision making.
Remarks:
- This one-semester module is available only to students on the Mannheim Master in Management (MMM) program.
- There are no formal prerequisites but it will be assumed that participants are familiar with introductory microeconomics at bachelor level.
- The module is offered in two parallel, identical streams of weekly sessions. In addition students attend weekly problem classes.
- Lectures and problem classes will be held in English.
Downloads: Module materials are available on ILIAS.
Exam script viewing: Owing to great demand we'll have more dates. The exam script viewing will take place in room 410 (L7, 3–5) on Monday, 25 March, at 9:30 and 10:00 for the December exam, and at 10:30 and 11:30 a.m. for the resit exam (also on 25 March). If you wish to look at your script, please send an email to our office (Mrs Pipphardt) to arrange this. In doing so please indicate your favorite times out of these options. Please note that we cannot offer individual feedback. A general feedback document for the December exam is available for download on ILIAS. The feedback document for the resit exam is also available for download on ILIAS now. If you think that the grading of one of your answers was unduly harsh, leave a note or email explaining your case, and we will get back to you as soon as possible (please allow at least two weeks). Please refrain from fishing for points without valid reason.
E 801: Advanced Microeconomics II – Spring 2018
Lecturer: Prof. Dr. Henrik Orzen, Prof. Takakazu Honryo, Ph.D.
The module consists of two parts. The first part (Honryo) covers the theory of general equilibrium. The goal is to introduce the basic concepts and tools in the field and to facilitate your transition from undergraduate study to your own research.
The second part (Orzen) covers essential topics of behavioral and experimental economics.BE 511 Business Economics 2 – Spring 2018
Lecturer: Prof. Dr. Henrik Orzen
Problem classes: Paolo Conteduca, Vahe Krrikyan, Chia-Yu Tsai, Niccolò Lomy
Building on BE 510 Business Economics 1, this module provides an introduction to economic models of strategic decision-making and behavior of firms in the context of oligopolistic competition. Topics include output and pricing strategies, the economics of collusion, market structure, market entry decisions and product differentiation. Some of these topics require a degree of analytical rigor and we will make use of some game-theoretical and mathematical methods.
Resit exam script viewing will take place on Tuesday, 9th October (9:30 a.m, 12 p.m., and 2 p.m.) and on Wednesday, 10th October (9:30 a.m., and 12 p.m.). Please send an email to our office (Friederike Pipphardt) to book a place if you would like to have a look at your exam. For the exams that were written on 12th June, please contact her for an individual appointment.
BE 510 Business Economics 1 – Autumn 2017
Lecturer: Prof. Dr. Henrik Orzen
Problem classes: Ms Chia-Yu Tsai, Mr Francesco Paolo Conteduca and Mr Xijian Su
This module will start with a brief review of standard models of choice, including choice under risk, and then move on to an extended introduction to non-cooperative game theory. Strategic decision making and relevant solution concepts for games of complete and incomplete information will be covered in detail. The course will close with a discussion of basic notions in the economics of information. An important aim is to convey an understanding and a working analytical knowledge of how economists model decision making.
Remarks:
- This one-semester module is available only to students on the Mannheim Master in Management (MMM) program.
- There are no formal prerequisites but it will be assumed that participants are familiar with introductory microeconomics at bachelor level.
- The module is offered in two parallel, identical streams of weekly sessions. In addition students attend weekly problem classes.
- Lectures and problem classes will be held in English.
Downloads: Module materials are available on ILIAS.
Exam script viewing: For those who have passed the December exam this will take place in March. The exact date is yet to be confirmed and will be announced here. A general feedback document is available for download on the ILIAS learning platform. If you have failed the December exam and wish to look at your script in preparation for the resit exam, you can do so by sending an email to our office (Friederike Pipphardt) to book a place for this.
BE 511 Business Economics 2 – Spring 2017
Lecturer: Prof. Dr. Henrik Orzen
Problem classes: Mr Vahe Krrikyan, Ms Maria Isabel Santana and Ms Joy Tsai
Building on BE 510 Business Economics 1, this module provides an introduction to economic models of strategic decision-making and behavior of firms in the context of oligopolistic competition. Topics include output and pricing strategies, the economics of collusion, market structure, market entry decisions and product differentiation. Some of these topics require a degree of analytical rigor and we will make use of some game-theoretical and mathematical methods.
NEW: Exam script viewing: This will take place on Wednesday, 4 October, for the June exam, and on Thursday, 5 October, for the resit exam. If you wish to look at your script, please send an email to our office (Mrs Pipphardt) to arrange this. In doing so please indicate your favorite times out of these options: 9:30 (only on Thursday), 10:00, 10:30, 11:00, 11:30, 12:00, 12:30. Late requests will not be accepted. Please note that we cannot offer individual feedback. A general feedback document is available for download on ILIAS. If you think that the grading of one of your answers was unduly harsh, leave a note or email us explaining your case, and we will get back to you as soon as possible. Please refrain from fishing for points without valid reason.
E878 Advanced PhD Seminar in Experimental Economics – Fall 2016
Seminar convenors: Prof. Dr. Henrik Orzen and Prof. Stefan Penczynski, PhD.
In this seminar participants present and discuss their current research as well as ideas for future research. If you are interested in the seminar, please contact one of the seminar convenors by email.
E883 Topics and Projects in Experimental Economics – Fall 2016
Lecturers: Prof. Henrik Orzen and Prof. Stefan Penczynski
This module intends to introduce PhD students to current topics in Experimental and Behavioral Economics and to familiarize them with recent advances in the field. The course will be delivered via a mix of lectures, joint readings of papers, in-class discussions and project work. The lectures will provide introductions to various topics and give relevant background information. Selected papers from the recent relevant literature will be discussed in depth. For this to work all participants will have to read specific papers in advance of individual meetings. Over the course of the semester each student is expected to lead the in-class discussion of two of the papers. The module will also provide a forum for students to discuss research ideas and preliminary work. In fact, students are expected to develop a research project of their own and present their advances, experimental design or data. This can be done individually or in pairs.
BE 510 Business Economics 1 – Fall 2016
Lecturer: Prof. Dr. Henrik Orzen
Problem classes: Ms Alessandra Allocca, Ms Maria Isabel Santana and Mr Xijian Su
This module will start with a brief review of standard models of choice, including choice under risk, and then move on to an extended introduction to non-cooperative game theory. Strategic decision making and relevant solution concepts for games of complete and incomplete information will be covered in detail. The course will close with a discussion of basic notions in the economics of information. An important aim is to convey an understanding and a working analytical knowledge of how economists model decision making.
Remarks:
- This one-semester module is available only to students on the Mannheim Master in Management (MMM) program.
- There are no formal prerequisites but it will be assumed that participants are familiar with introductory microeconomics at bachelor level.
- The module is offered in two parallel, identical streams of weekly sessions. In addition students attend weekly problem classes.
- Lectures and problem classes will be held in English.
Downloads: Module materials are available on ILIAS.
Exam script viewing: This will take place on 21 March. If you wish to look at your script, please send an email to our office (Ms Yvonne Reiter) to book a time slot. Late requests will not be accepted. Please note that we cannot offer individual feedback. General feedback documents for both exams are available on ILIAS. If you think that the grading of one of your answers was unduly harsh, leave a note or email us explaining your case, and we will get back to you as soon as possible. Please refrain from fishing for points without valid reason.
2015/
2016 BE 511 Business Economics 2 – Spring 2016
Lecturer: Prof. Dr. Henrik Orzen
Problem classes: Ms Alessandra Allocca, Ms Maria Isabel Santana and Ms Joy Tsai
Building on BE 510 Business Economics 1, this module provides an introduction to economic models of strategic decision-making and behavior of firms in the context of oligopolistic competition. Topics include output and pricing strategies, the economics of collusion, market structure, market entry decisions and product differentiation. Some of these topics require a degree of analytical rigor and we will make use of some game-theoretical and mathematical methods.
Exam script viewing: If you took the exam in June you can look at your exam script on Monday, 26 September (during the morning). If you took the exam in September you can look at your exam script on the following day, on Tuesday, 27 September (again in the morning). If you wish to look at your script, please send an email to our office (Ms Yvonne Reiter). Late requests will not be accepted. Please note that we cannot offer individual feedback. Please read the general feedback document on ILIAS. If you think that the grading of one of your answers was unduly harsh, leave a note or email us explaining your case, and we will get back to you as soon as possible. Please refrain from fishing for points without valid reason.
Biases in economic decision making – Block seminar – Spring 2016
Seminar convenor: Prof. Dr. Henrik Orzen
This seminar introduces students to a range of empirical and experimental findings that indicate systematic biases in human decision making. While our brains can perform many complex tasks, there is evidence that humans tend to commit specific cognitive errors in certain types of situations. Sometimes, such evidence is debated controversially in the literature. Several topics from this area will be discussed in the seminar.
The course will be held as a block seminar on Friday, 19 February, and Friday, 4 March. The seminar is targeted at advanced undergraduate students. To register you must have completed Microeconomics B (or equivalent). The course language will be English.
Criteria for assessment are active participation, a presentation, a handout and a seminar paper.
A list of topics can be downloaded here. If you wish to take part in the seminar, please send an e-mail to Ms Reiter. The registration period is from 22 to 27 November 2015. Please name your three most-preferred topics in your application. You are also welcome to propose a topic yourself. In that case please get in touch with Professor Orzen. We will employ a first-come first-serve approach (e-mails arriving before the registration period will be disregarded). Should the seminar be full we will inform you and add your name to a waiting list. Please inform us if you are no longer available.
E878 Advanced PhD Seminar in Experimental Economics – Fall 2015
Seminar convenors: Prof. Dr. Henrik Orzen and Prof. Stefan Penczynski, PhD.
In this seminar participants present and discuss their current research as well as ideas for future research. If you are interested in the seminar, please contact one of the seminar convenors by email.
E883 Topics and Projects in Experimental Economics – Fall 2015
Lecturers: Prof. Henrik Orzen and Prof. Stefan Penczynski
This module intends to introduce PhD students to current topics in Experimental and Behavioral Economics and to familiarize them with recent advances in the field. The course will be delivered via a mix of lectures, joint readings of papers, in-class discussions and project work. The lectures will provide introductions to various topics and give relevant background information. Selected papers from the recent relevant literature will be discussed in depth. For this to work all participants will have to read specific papers in advance of individual meetings. Over the course of the semester each student is expected to lead the in-class discussion of two of the papers. The module will also provide a forum for students to discuss research ideas and preliminary work. In fact, students are expected to develop a research project of their own and present their advances, experimental design or data. This can be done individually or in pairs.
BE 510 Business Economics 1 – Fall 2015
Lecturer: Prof. Dr. Henrik Orzen
Problem classes: Johannes Dittrich, Xin Gao, Christoph Wolf
This module will start with a brief review of standard models of choice, including choice under risk, and then move on to an extended introduction to non-cooperative game theory. Strategic decision making and relevant solution concepts for games of complete and incomplete information will be covered in detail. The course will close with a discussion of basic notions in the economics of information. An important aim is to convey an understanding and a working analytical knowledge of how economists model decision making.
Remarks:
- This one-semester module is available only to students on the Mannheim Master in Management (MMM) program.
- There are no formal prerequisites but it will be assumed that participants are familiar with introductory microeconomics at bachelor level.
- The module is offered in two parallel, identical streams of weekly sessions. In addition students attend weekly problem classes.
- Lectures and problem classes will be held in English.
Downloads: Module materials are available on ILIAS.
NEW: Exam script viewing: If you took the exam in December you can look at your exam script on Monday, 14 March (during the morning). If you took the exam in February you can look at your exam script two days later, on Wednesday, 16 March (again in the morning). If you wish to look at your script, please send an email to our office (Ms Yvonne Reiter) to book a time slot. Late requests will not be accepted. Please note that we cannot offer individual feedback. Please read the general feedback documents on ILIAS. If you think that the grading of one of your answers was unduly harsh, leave a note or email us explaining your case, and we will get back to you as soon as possible. Please refrain from fishing for points without valid reason.
Biases in economic decision making – Block seminar – Fall 2015
Seminar convenor: Prof. Dr. Henrik Orzen
This seminar introduces students to a range of empirical and experimental findings that indicate systematic biases in human decision making. While our brains can perform many complex tasks, there is evidence that humans tend to commit specific cognitive errors in certain types of situations. Sometimes, such evidence is debated controversially in the literature. Several topics from this area will be discussed in the seminar.
The seminar is targeted at advanced undergraduate students. To register you must have completed Microeconomics B (or equivalent). The course language will be English. The course will be held as a block seminar on Friday, 6 November, and Friday, 13 November. A first organisational meeting will take place on Tuesday, 8 September at 3:30pm (room: tbc).
Criteria for assessment are active participation, a presentation, a handout and a seminar paper. A list of topics can be downloaded here.
How to find us
The Department of Economics is located in L7, 3–5. L7 denotes the block number (Mannheim downtown is organized in blocks, not in streets), and 3–5 is the house number. The Chair of Experimental Economics is located on the 4th floor. You can reach Mannheim by car, by train or by plane.