From preferences to pricing, researchers use Business Simulation Lab to create controlled experiments

Cornell researchers can track market trends, observe consumer choices and analyze price preferences by observing how people behave and make decisions, thanks to the Johnson School's Business Simulation Lab.

The Debra Paget and Jeffrey Berg Business Simulation Laboratory (BSL), which recruits Cornell students to participate in its studies, allows researchers to present people with realistic business situations in a controlled-experiment setting. They then analyze the volunteers' behavior through the lenses of psychology and economics.

With a subject pool of about 2,000 students, the lab is used by faculty from such disciplines as finance, marketing and management. Students who participate in the studies are either paid or receive extra credit in certain courses.

"It's a way to understand whether psychological, economic or sociological theories match what people actually do in the laboratory," explained Margaret Shackell-Dowell, BSL manager and visiting lecturer at the Johnson School.

With 20 computers separated by high-walled cubicles, the lab is equipped with software and other technology for research on a wide range of topics. Some studies only require participants to fill out paper surveys. Others involve group activities and observation.

Matt Wallaert, a graduate student in human development who studies judgment and decision-making in collaboration with Leaf Van Boven, Johnson School assistant professor of marketing and behavioral science, recently used the lab to conduct an experiment on cognitive dissonance, decision processes and product satisfaction. He sees the goal of the BSL not only for researchers to collect data, but also for educational purposes.

"There's a real experiential learning component to participating in a study," Wallaert said, explaining that after every study, the participants are told what the study's goals were. "People don't come to experiments with that expectation, but they usually end up learning something about themselves and others."

Manoj Thomas, Johnson School assistant professor of marketing, calls the BSL his "lifeline," he said, as he uses it at least once a month for research. Studying cognitive processes that underlie how people make choices about prices, Thomas uses the lab to test subjects on their response times, judgment and other factors in making these decisions.

"I need a resource where I can collect a lot of data efficiently," Thomas said.

Students can sign up to be considered for the BSL subject pool at http://www.johnson.cornell.edu/research/bsl/.

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