The goals of experimental finance are to establish different market settings and environments to observe experimentally and analyze agents' behavior and the resulting characteristics of trading flows, information diffusion and aggregation, price setting mechanism and returns processes. This can happen for instance by conducting trading simulations or establishing and studying the behaviour of people in artificial competitive market-like settings.
Researchers in experimental finance can study to what extent existing financial economics theory makes valid predictions and attempt to discover new principles on which theory can be extended.
The methodology of experimental finance is closely related to that of Experimental economics.
Famous quotes containing the words experimental and/or finance:
“Philosophers of science constantly discuss theories and representation of reality, but say almost nothing about experiment, technology, or the use of knowledge to alter the world. This is odd, because ‘experimental method’ used to be just another name for scientific method.... I hope [to] initiate a Back-to-Bacon movement, in which we attend more seriously to experimental science. Experimentation has a life of its own.”
—Ian Hacking (b. 1936)
“Imperialism is capitalism at that stage of development at which the dominance of monopolies and finance capitalism is established; in which the export of capital has acquired pronounced importance; in which the division of the world among the international trusts has begun, in which the division of all territories of the globe among the biggest capitalist powers has been completed.”
—Vladimir Ilyich Lenin (1870–1924)