Prof. Vernon Smith received the Nobel Prize in Economics in 2002 for establishing laboratory experiments as a tool in empirical economic analysis, especially in the study of alternative market mechanisms. Thanks to his work, previously "untestable" economic propositions can be investigated in controlled laboratory experiments. His approach is widely recognized as the way of the future for economics.
Before winning the Nobel Prize, Prof. Smith's ideas had already made a significant impact on the formulation of major government policies. Examples of his work include advising the Australian and New Zealand governments on privatization issues, developing market designs for the Arizona stock exchange, and designing an electronic market for water in California. Likened to a "wind tunnel" for business, big companies such as Sears and IBM are using experimental economics to solve business problems. In fact, this revolutionary approach has also been used as a decision-making tool in many other areas, from helping NASA structure a space mission to predicting the next Oscar winners, all with good results.
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In his talk in Hong Kong, Prof. Vernon Smith shared his insights into three related topics - Globalization, Freedom and Wealth.