Matter of Policy

This dissertation is a collection of essays that employ experimental economic methodology in a variety of settings to address important uses of microeconomic and macroeconomic public policy. Chapter 1 serves as a forward to the remaining chapters. It highlights the importance of experimental economics to policy decisions and its unique place in the overall field of economics. Chapter 2 of this dissertation explores the influence of the ratchet effect on a bureaucracy's expansion and the resulting consequences. To examine the individual effects of adverse selection and moral hazard, Chapter 3 uses an experimental method to study how asymmetric information affects individual behavior when insurance is present. Finally, Chapter 4 addresses the claim that money is neutral and its arbitrary injection into a market has no distributional effects. Throughout this dissertation, experimental economic methodologies will be employed in an array of economic fields demonstrating the broad applicability of experimental economics.