The McMaster Experimental Economics Laboratory (McEEL), was the first computerized laboratory of its type in Canada.

McMaster University has been an active centre for laboratory experimentation in economics since 1986, when Stuart Mestelman and Douglas Welland began a systematic investigation of advance production in auction markets. McEEL was established in 1994, funded in large part by a Canadian Tri-Council Eco-Research Grant. Since that time, this research program has produced:

• More than 100 publications
• Eight completed PhD dissertations and many more in progress
• Many post-doctoral fellowships
• An ongoing stream of works in progress

Environmental Regulation

A central theme of our original work related to environmental regulation is the interplay of market power and the design of institutions (i.e., rules/laws) for pollution emissions trading. Key findings include:

• High efficiency of trading in shares: Muller and Mestelman demonstrated this, along with the price-stabilizing effects of permit banking.
• Monopolists in emissions trading markets: Later work with Godby and Spraggon established that monopolists can effectively exercise their power, even under pro-competitive conditions of a double auction.
• Open-market vs. cap-and-trade plans: Research with Buckley investigated the efficiency of these plans, informing public policy on pollution and environmental emissions control.

Common Property Resources

Our research on common property resources has explored various aspects:

• Role of communication: Muller and Vickers investigated this when resources are subject to probabilistic destruction.
• Monitoring and sanctioning: Moir studied these roles in non-cooperative behaviour.
• Incentives for over-exploitation: Recent work with Buckley, Schott, and Zhang examined how team production incentives can offset over-exploitation.

Voluntary Provision of Public Goods

This theme, closely related to common property resources, includes:

• Conditional cooperation: Khan and Ruffle show that individual contributions respond not only to others’ average contribution, but also to the distribution of contributions
• Heterogeneity in tastes and endowment: Investigated by Chan, Mestelman, Muller, Godby, and Moir.
• Value orientation in public goods contributions: Explored by Mestelman and various co-authors.
• Trust and reciprocity: Research on these aspects, along with public input and volunteering.

Health Care Funding and Financing

A more recent research theme explores issues of funding and financing in health care, funded by CIHR. This work brings together a team of public economists, health economists, and experimentalists to evaluate:

• Impact of private health care: Experimental evaluation in an environment characterized by public health care similar to that in Canada.

Other Research Areas

Over the years, our laboratory has produced research that defies easy categorization, including:

• Order of play and forward induction in game theory: Muller and Sadanand
• Behaviour of financial auditors: Mestelman and Shehata
• Responses to wage taxation: Sillimaa
• Speculation in currency markets: Childs
• Role of middlemen in gas markets: Bloemhof
• Impact of productivity shocks on effort and wages: Mestelman and Scarth
• Social value orientation and risk on trust and reciprocity: Kanagaretnam, Mestelman, Nainar, and Shehata

Mestelman & Muller McMaster Decision Science Laboratory (McDSL)

In 2014, a team led by Jeremiah Hurley was awarded a Canada Foundation for Innovation (CFI) grant that funded the creation of our next-generation laboratory facility – the McMaster Decision Science Laboratory (McDSL). Located in L.R. Wilson Hall, McDSL opened in 2016/17 and has expanded our research capacity to include:

• Qualitative and advanced computer exploration: Resources and dedicated spaces for various research areas involving human participant decision-making.
• Controlled experimental sessions: Conducted in the advanced McDSL Experimental Suite, including custom-programmed experiments using software like Borland Delphi, Java, PHP, Z-Tree, oTree, and Unity.
• Survey instruments: Used to examine topics like fairness in health resource allocation, financial and health inequalities, hospital patient needs, government health benefits preferences, and effects of cigarette packaging on smoking behaviours.
• Virtual-reality technologies: Recently begun exploration to simulate levels of health in decision experiments.

In 2019, Bradley Ruffle joined McMaster and became McDSL’s Academic Director. He has since attracted six PhD students who work on diverse topics such as mechanism design, conditional cooperation, voluntary contributions of effort and money, applied game theory and the rental housing market.