This might involve, for example, establishing different market settings and environments to observe experimentally and analyze agents' behavior and the resulting characteristics of trading flows, information diffusion and aggregation, price setting mechanism and returns processes.
Much analysis is done on data from international markets including bids, asks, transaction prices, volume, etc.
Self-selection: By randomly assigning subjects to different treatment groups, the experimenters avoid issues caused by self-selection and are able to directly observe the changes in the dependent variable by changing by altering certain independent variables.
Traditional data analysis may not be able to observe some variables, but sometimes experimenters cannot directly elicit certain information from subjects either.
[9] The use of lab experiments increased due to growing interest in issues such as economic cooperation, trust, and neuroeconomics.
Natural experiments are popular in economic and finance research since they offer intuitive interpretation of the underlying identifying assumptions and enable a broader audience to check their consistency, this compared to purely statistical identification.
[10] Experimental methods in finance offer complementary methodologies that have allowed for the observation and manipulation of underlying determinants of prices, such as fundamental values or insider information.
Experimental studies complement empirical work, particularly in the area of theory testing and development.