Three precepts are offered to constitute a foundation for the use of laboratory experimental methods in testing hypotheses about the behavior of allo… - Vernon L. Smith

In the Autumn semester, 1955, I taught Principles of Economics, and found it a challenge to convey basic microeconomic theory to students. Why/how could any market approximate a competitive equilibrium? I resolved that on the first day of class the following semester, I would try running a market experiment that would give the students an opportunity to experience an actual market, and me the opportunity to observe one in which I knew, but they did not know what were the alleged driving conditions of supply and demand in that market

Parallelism: Propositions about the behavior of individuals and the performance of institutions that have been tested in laboratory microeconomies apply also to nonlaboratory environments where similar ceteris paribus conditions prevail.

In economics the tendency of theory to lag behind observation seems to be endemic, and, as theorists, few of us consider this to be a "terrible state." But as noted by Lakatos (1978, p. 6), "where theory lags behind the facts, we are dealing with miserable degenerating research programmes."