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A defence of absurd theories in economics

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  • Ole R�geberg
  • Morten Nordberg

Abstract

Theories that involve plainly false and even bizarre assumptions could have an important role in bundling empirical facts and allowing these to be understood, handled and used as modules in the construction of mechanisms by economists with human cognitive limits. Absurd theories would be subcomponents used in a valid explanatory strategy as long as the mechanisms only derive the implications of the facts summarised. This provides a defence and explanation of parts of current practise, but also imposes hard limits on such theorising.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Journal of Economic Methodology.

Volume (Year): 12 (2005)
Issue (Month): 4 ()
Pages: 543-562

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Handle: RePEc:taf:jecmet:v:12:y:2005:i:4:p:543-562

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Keywords: as-if theory; economic methodology; welfare economics;

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