What is induced value theory? What is an example of experimental economics?

The induced value theory was introduced by Vernon Smith (1976-1982), it explains fundamental of experimental economics methodology and argued that people with varied background may interpret the value of ethics embedded in the context differently. It explains the experiment to achieve control over subject’s preference by means of reward medium . The induced value theory has three main ingredient 1) Monotonicity 2) Salience 3) Dominance. The monotonicity means that subjects must prefer amounts of the reward medium. Salience explains the reward earned by subject must depends on his or her preference and choice and possibly one of the subject as specified by the experiment. Dominance explain the reward dominates any subjective costs associated with participation in an experiment.

Consider an example of economic experiment in Monetary Economics. Is money welfare improving? Does Milton Friedman work as intended in a hypothetical society? Neutrality of money? Welfare cost of inflation? Why? Some consider proposition in Monetary Economics difficult and unethical to test in the field.