This project continues the development and application of laboratory experimental methods in the broad field of political economy and on the principles that govern the behavior of interdependent and changing systems begun under earlier NSF grants. There will be an intensified focus on the interdependence and dynamic behavior of complicated systems, and on new institutional arrangements that facilitate the efficient use of information and the reduction of uncertainty. This project will play a leadership role in using experimental methods as testbeds for the types of institutional changes currently under consideration as a response to the challenges posed by global environmental change. This project will also contribute to our understanding of the way decisions are made under uncertainty with irreversibilities and potentially catastrophic consequences for future generations. Research projects can be grouped into five categories: 1) those that focus primarily on the interdependence of activities of economic processes; 2) those in which information plays a central role; 3) those that focus more narrowly on the properties of equilibria that occur in markets; 4) those that involve the "testbedding" of new institutions; and 5) experimental technology development. The research on experimental technology development is especially exciting because it will make a sophisticated experimental system capable of supporting a very wide range of experiments freely available for a broad audience of researchers. Under the previous grant a manual and diskette were produced and disseminated for a computerized laboratory market system. The package included programs for creating and executing experiments, programs for viewing and processing data, and programs for training subjects. The technology development effort will now turn to processes with political elements. Since politics is frequently about the choices of institutions and processes, any new software should be capable of facilitating experiments in which institutional evolution can take place.
