There's gold in them thar hills!

In the Woody Allen film Radio Days, a character who has never been able to succeed in the world of business decides to begin a career engraving gold jewelry. He argues that this should be especially lucrative because the engraver gets to keep the gold dust from other people's rings. Using economics, explain what is wrong with this character's assessment of his potential career choice?

Experimental Economics

Experimental economics involves the application of laboratory methods as a means of understanding human behavior. By conducting laboratory experiments, economists are able to evaluate competing theories of individual and market behavior where naturally occuring data is absent or limited. Arguably the first use of a market experiment occured in a graduate economics class involving a teacher (who was a well-known economist in the area of industrial organization) and a student (who would later be a pioneer in the field of experimental economics). Can you name the teacher, student, the college, and the year wherein the first recorded use of a classroom experiment in economics took place?

Congratulations to Jenny Kuebel for quickly identifying Edward Chamberlin of Harvard University conducted the first recorded market experiment in 1948. A participant in that experiment was Vernon Smith who was later to become a pioneer in developing a new branch of economic analysis known as experimental economics.