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:
“Whenever a man acts purposively, he acts under a belief in some experimental phenomenon. Consequently, the sum of the experimental phenomena that a proposition implies makes up its entire bearing upon human conduct.”
—Charles Sanders Peirce (1839–1914)
“A bank is a confidence trick. If you put up the right signs, the wizards of finance themselves will come in and ask you to take their money.”
—Christina Stead (1902–1983)