Defence of Absurd Theories in Economics
AbstractTheories that involve plainly false and even bizarre assumptions are argued to have an important role in bundling empirical facts in a way that allows these to be understood, handled and used as modules in the construction of mechanisms by economists with human cognitive limits. Absurd theories are 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 many economic theories, but also imposes hard limits on such theorising.
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Bibliographic InfoPaper provided by Oslo University, Health Economics Research Programme in its series HERO On line Working Paper Series with number 2003:18.
Length: 25 pages
Date of creation: 22 Jun 2009
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As-if theory; Economic methodology; welfare economics;
Other versions of this item:
- B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
- D00 - Microeconomics - - General - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-07-11 (All new papers)
- NEP-HPE-2009-07-11 (History & Philosophy of Economics)
- NEP-NEU-2009-07-11 (Neuroeconomics)
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