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'UCRL-3773 Some experimental consequences of the Luders theorem are discussed.

II. INTRODUCTION TO EXPERIMENTAL ECONOMICS A. A Brief Introduction to Experimental TechniqueIn the sections which follow we will review in some detail the techniques and results of a substantial amount of experimental work. However, to prepare the reader who is completely unacquainted with experimental procedure to understand the discussion below, we will first very briefly sketch the techniques and methodological motivations for using experiments.First, what are "experimental techniques"? An experiment in economics almost always includes at least four important features. First, the experimenters observe the behavior of human subjects--often college students--who are following a set of instructions. The instructions ask the subjects to make certain decisions and promise to pay them money at the conclusion of the experiment. The amount of money each subject ia paid depends on the decisions he makes.Second, the instructions place the subjects in an abstract version of some naturally-occurring economic environment, in which they are required to play the roles of specific economic agents, such as consumers or firms.These instructions also provide the social institutions within which the subjects may interact. An experiment must abstract from the naturallyoccurring environment because the "real world" subjects of economic inquiry, such as stock exchanges or disputes between landowners, are often tremendously detailed and complex. To analyze these complex subjects, economists build theories which abstract from many of these details. 1Laboratory experiments abstract in an entirely analogous fashion.Third, the payoffs to subjects are structured so as to induce preferences in any subject who prefers earning more money to earning less money. For example, if an experimenter wishes to study a "seller's" behavior, the instructions might inform a subject that he may purchase a "commodity" at a fixed price from the experimenter ('p'), that he can sell the commodity to another subject at any price he can persuade the other subject to agree to ('a'), and that the experimenter will pay the subjectIn exchange for the loss of detail in the theories, economists (hope to) gain theoretical tools which, can, in many circumstances, predict behavior. Such economic theories commonly presume that an "environment" contains utility-maximizing consumers who have various amounts of wealth and differing preferences, and profit-maximizing firms, each with its own ability to turn raw materials into valued goods and services. There are abstract versions of social institutions, such as the law of tort end contract, which enable these consumers and firms to interact. This interaction produces goods and services, which are distributed to the consumers. 3.the difference between sale and purchase price (s-p). Under these circumstances, any subject who prefers to take home as much money as he can will also prefer to make his sale at as high a price as he can. In this way, the experimenter can induce subjects to try to "sell high, buy low," just as real ...

Supreme Court announced a now famous doctrine. When the federal courts review an administrative agency's interpretation of its own statute, the agency's interpretation may be set aside only if Congress has "directly spoken to the precise question at issue" 2 and the agency's interpretation fails to conform to congressional intent. Congress may speak to a question either by enacting clear language, or by unambiguous legislative history. If congressional intent is unclear or missing, the federal courts must defer to the administrative interpretation as long as that interpretation is reasonable. 3 As has been suggested, this two-step test can be boiled down to the rule that federal courts must respect any reasonable interpretation by an administrative agency of its own statute. 4

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