Economic Models as Analogies
AbstractPeople often wonder why economists analyze models whose assumptions are known to be false, while economists feel that they learn a great deal from such exercises. We suggest that part of the knowledge generated by academic economists is case-based rather than rule-based. That is, instead of offering general rules or theories that should be contrasted with data, economists often analyze models that are “theoretical cases”, which help understand economic problems by drawing analogies between the model and the problem. According to this view, economic models, empirical data, experimental results and other sources of knowledge are all on equal footing, that is, they all provide cases to which a given problem can be compared. We offer some complexity arguments that explain why case-based reasoning may sometimes be the method of choice; why economists prefer simple examples; and why a paradigm may be useful even if it does not produce theories.
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Bibliographic InfoPaper provided by Penn Institute for Economic Research, Department of Economics, University of Pennsylvania in its series PIER Working Paper Archive with number 12-001.
Length: 32 pages
Date of creation: 07 Dec 2011
Date of revision:
Methodology; Case-based reasoning;
Find related papers by JEL classification:
- B40 - Schools of Economic Thought and Methodology - - Economic Methodology - - - General
- B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-01-10 (All new papers)
- NEP-CBE-2012-01-10 (Cognitive & Behavioural Economics)
- NEP-HPE-2012-01-10 (History & Philosophy of Economics)
- NEP-MIC-2012-01-10 (Microeconomics)
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- New Paper: Economic Models as Analogies by Itzhak Gilboa et. al.
by N. Emrah Ayd?nonat in N. Emrah Aydınonat (English) on 2012-01-14 20:53:37
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