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Chamberlin's strategy of multiple working hypotheses and a relative frequency theory of market demand

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  • Basmann, R.L.

Abstract

The neoclassical theory of demand based on fixed indifference map hypotheses has not yet become significantly assertible in the sense of modern logic. That is because of the great difficulty encountered in empirical confirmation of its presuppositions and antecedent hypotheses, which is essential to its significant assertibility. Full confirmation of antecedent conditions is impossible with market equilibrium data alone. That puts a considerable premium on approaching any investigation in econometric demand analysis with several mutually testable hypotheses that are already well-explored and thought through. Preparation is necessary to recognize when otherwise interesting mutually testable economic hypotheses cannot be tested because the nature of the data required has not yet been adequately discerned. ...it becomes clear that hypotheses always remain hypotheses, that is, suppositions to the complete certainty of which we can never attain. [Kant, Immanuel, 1988. Logic. Dover Publications, Inc., New York, NY, Translation of Kant's Logik: Ein Handbuch zu Vorlesungen (1800), by Robert S. Hartman and Wolfgang Schwarz]. The effort is to bring up into view every rational explanation of new phenomena, and to develop every tenable hypothesis respecting their cause and history. [Chamberlin, T.C., 1890. The method of multiple working hypotheses. Science (Old series) 15. Reprinted in 1965 in Science 148, 754-759].

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  • Basmann, R.L., 2008. "Chamberlin's strategy of multiple working hypotheses and a relative frequency theory of market demand," Journal of Econometrics, Elsevier, vol. 147(2), pages 225-231, December.
  • Handle: RePEc:eee:econom:v:147:y:2008:i:2:p:225-231
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    References listed on IDEAS

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    1. Basmann, R. L., 1988. "Causality tests and observationally equivalent representations of econometric models," Journal of Econometrics, Elsevier, vol. 39(1-2), pages 69-104.
    2. L. R. Klein & H. Rubin, 1947. "A Constant-Utility Index of the Cost of Living," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 15(2), pages 84-87.
    3. Wulwick, Nancy J., 1992. "The Folklore of H. L. Moore on the Demand for Pig Iron," Journal of the History of Economic Thought, Cambridge University Press, vol. 14(2), pages 168-188, October.
    4. E. J. Working, 1927. "What Do Statistical "Demand Curves" Show?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 41(2), pages 212-235.
    5. R.L. Basmann & R.C. Battalio & J.H. Kagel, 1976. "An Experimental Test of a Simple Theory of Aggregate Per-capita Demand Functions," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 112(II), pages 153-173, June.
    6. Basmann, R L & Molina, D J & Slottje, D J, 1983. "Budget Constraint Prices as Preference Changing Parameters of Generalized Fechner-Thurstone Direct Utility Functions," American Economic Review, American Economic Association, vol. 73(3), pages 411-413, June.
    7. Slottje, D J, 1987. "Relative Price Changes and Inequality in the Size Distribution of Various Components of Income: A Multidemensional Approach," Journal of Business & Economic Statistics, American Statistical Association, vol. 5(1), pages 19-26, January.
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