Abstract: Vernon Smith who won the 2002 Nobel Prize in economics was the father of experimental economics. He was awarded the Nobel Prize “for having established laboratory experiments as a tool in empirical economic analysis, especially in the study of alternative market mechanisms”. The paper discussed the theoretical base and the main research area of experimental economics. It also introduced a new trend of experimental economics—neuroeconomics. The paper briefly analyzed experimental economics’ implication to psychology.

Key words: Vernon Smith, experimental economics, constructivist rationality, ecological rationality