The Science of Economics

John Ledyard is an economist, but when he talks about the work that he and his colleagues who study socioeconomic systems at Caltech have completed over the last decade with the support of the Gordon and Betty Moore Foundation, he looks to astronomy for an appropriate metaphor. He’s trying to find a way to explain the importance and utility of a suite of software they have developed.

“It’s kind of like building a new, powerful telescope,” Ledyard says. “It’s not that all of the astronomers using that telescope are working on the same thing, but because of the larger telescope, they can all do a lot more, different work. What the Moore Foundation grant enabled us to do was to build a bigger measurement device.”

The new software, along with funding, has enabled researchers to create and run experiments in the lab to test all sorts of market systems involving social interactions—everything from the effect of inequality on tax rates to the best way for the United Nations to auction off pallets of natural rubber in Vietnam.

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