Experimental economics is a method of empirical inquiry by which an economist creates a stylized version of an economic order in a controlled laboratory environment. Human subjects are given a set of rules by which they must conduct themselves and interact with one another (usually through a computer program), and cash payments based on the outcomes of their choices provide them an incentive to behave as they would in a real-world situation. The behavior of the subjects is then analyzed to assess the effects of the rules on their behavior.

Economic experiments serve a number of purposes, including:

- Testing (and stress testing) economic theory.
- Providing insight into the effects of proposed organizational rules and systems, as well as public policies.
- Facilitating the design of market institutions by allowing a direct comparison of alternative institutions in identical environments
- Teaching economic concepts to lay audiences by allowing them to actively experience economic forces at work.

The experimental approach provides certain advantages over traditional field studies. Because the experimenter controls the economic order, he can generate data to study precisely the economic question in which he is interested. In addition, this control allows him the ability to limit the unobservable factors that impact his data set. The experimenter can also easily revise his experimental protocols if results from earlier research efforts suggest a new direction of study.

In addition to more traditional research methods, the MBM Institute makes use of economic experiments via a mobile laboratory, as well as a stationary lab at Wichita State University.