Donald Campbell work had helped to alter the validity from being just a psychological test to be a psychological experiment, validity had been distinguished into two main categories the first was the internal validity experiment and the other was the external validity these two main domains were the one which transferred to Economics, the continuous work on validity had led Francesco Guala to more specific and analytics definition of the internal experiment.
Validity means, how accuracy the experiment is, the concept of validity had been changed throw-out history , at first it changed from psychological test to psychological experiment , then it changed from psychological experiment to an experiment which can be used by other type of behaviour…show more content… The internal validity normally means the experiment held on the laboratory, while the external experiment refer to the generalization of the experiment. For Economic perspective Vernon Smith, has developed a unique experimental approach, influenced by the psychologist Sidney Siegel, Smith tried to transfer the psychological experimental method to economic research. Smith approach can be concluded as a mix of set-theory and Bayesian statics, trying to make a connection between the nature model and the experimental results to establish the validity of the experiment. Smith and his follower Plott refused the validity norm which was proposed by the psychologist because they thought that ,it would be against experimental economics, Plott consider the internal laboratory experiment as an artificial and can’t be relied on to explain the economic. Despite that from the 1980 experimental economists begin slowly to adopt the psychological categories and validity.
With the acceptance of the internal and external experiment by the experimental economist other economic branches begin to follow as well like behavioural economists. Behavioural economists have disregarded the differences between the internal and external experiment, they argued that both of them are based on observation, and for them the difference wasn’t…show more content… In contrary to what thought before them especially by Friedman, models are judged by its ability to predict, according to Adelmans, models can’t use in prediction because most of the time they are different than the actual figures. For Adelmans a good model is the model that can represent the economic cycle in a good way, catching the important aspect which affect real life economy. The criteria they used to judge a model was that, if the model generates statistical pattern which is similar to statistical pattern of actual data, then the model can be considered as a good representative. Later on the Adelman-Adelman test has been improved adding more understandable view of how the model really work which is similar to the work of Tinbergen, the new model can assess provide advice over applying certain long term policies. A very important question still exist, how can we give creditability the model’s outcome? The criteria used here is by an economist who would examine the data and if he couldn’t tell the period which this these data generated from then the simulated figure is