Orange flyers can be found on bulletin boards throughout the Andrew Young School of Policy Studies, enticing undergrads to take part in an experiment to earn cash. No gimmicks and no small print.
Sound too good to be true? Well, according to James Cox, director of the Experimental Economics Center, it’s not.
From economic research for cash to developing software to make better doctors, Cox is using human guinea pigs for economic and policy change.
After a successful stint at the University of Arizona leading economic tests and research Cox came to the Andrew Young School to start testing students and others in Atlanta. The National Science Foundation and the National institute of Health fund his Experimental Economics Center.
“These techniques are ones that are generally known by economists and have been for about 40 years,” Cox said.
The different “games” students play at the testing center test economic theory as it is applied to real life buyer/seller scenarios. Abstract commodities are applied to stock exchange and retail market rules to see what types of decisions student make when faced with potentially risky economic decisions.
The better the economic decision of the student, the more money they get at the end of the experiment.
On thing Cox looks at is who should be taxed in a market: buyers or sellers?
“Who is more sensitive to the price change, the sellers or the buyers… well that’s a theory that’s taught to economic students, the question is does it have imperial validity?” Cox asked. “That has implications for economists and how they teach their students— which is what they’ve been teaching their students is seriously incomplete.
The result: student making some extra cash while Cox is filling economic research journals with valuable research for the economy.
Cox said now it’s more than Wall Street.
In a collaboration with a sister lab at the University of Indiana, Cox and other researchers examine different social dilemmas in modern society. Cox worked with the late Dr. Elinor Ostrom on this research, which will be published in the Southern Economic Journal this coming January.
For example, a social dilemma about common pool resources is the decreasing fish population.
“What’s happening is the cost of fishing is getting incredibly higher because the fish population is lower, and if the fish population is pushed down too far it becomes extinct.”
The work with the University of Indiana identifies why people make the moral decisions they do with regard to public goods and common pool resources.
Ostrom, previously of the University of Indiana, was the first woman to win the Nobel Peace Prize in Economics while working on research with Cox on common pool resources.
His most recent research has been with Emory University.
“Now we are working to make decision support software to help physicians improve the way they make hospital discharges,”
According to Cox, Medicare considers a medical discharge unsuccessful if the patient returns in less than 30 days.
“It involves a very important tradeoff between the quality of care and the cost of care,” Cox said. “Hospital re-admissions currently cost Medicare about $17 billion a year.”
From Cox’s research software will be developed to look at previous discharge situations to see if a patient needs to stay in the hospital just one more day.
