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Ruminations on Challenges to Prediction with Rational Choice Models

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  • Bruce Bueno de Mesquita

    (Hoover Institution, Stanford University, Stanford, CA 94305-6010, USA bdm@hoover.stanford.edu)

Abstract

The ultimate test of any social science theory lies in its ability to predict and explain real behavior. Converting formal theory into a form that can be tested against real-time predictions, however, is a difficult and demanding task. The growing literature on applied formal models provides an opportunity to investigate how robust predictions are to the relaxation of specific assumptions. Here I investigate the robustness of applied theories in the light of multiple equilibria and the chaos theorems of McKelvey and Schofield, alternative dimensionality assumptions, modifications of conditions for preference aggregation, and bounded rationality - all with an eye toward their implications for the accuracy of predictions regarding outcomes and decision dynamics. We come to a better understanding of the challenges that remain in converting formal models into practical tools to guide the assessment and making of complex decisions.

Suggested Citation

  • Bruce Bueno de Mesquita, 2003. "Ruminations on Challenges to Prediction with Rational Choice Models," Rationality and Society, , vol. 15(1), pages 136-147, February.
    • Handle: RePEc:sae:ratsoc:v:15:y:2003:i:1:p:136-147
    DOI: 10.1177/1043463103015001076
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    5. Ray, James Lee & Russett, Bruce, 1996. "The Future as Arbiter of Theoretical Controversies: Predictions, Explanations and the End of the Cold War," British Journal of Political Science, Cambridge University Press, vol. 26(4), pages 441-470, October.
    6. Sargent, Thomas J., 1993. "Bounded Rationality in Macroeconomics: The Arne Ryde Memorial Lectures," OUP Catalogue, Oxford University Press, number 9780198288695, Decembrie.
    7. Norman Schofield, 1978. "Instability of Simple Dynamic Games," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 45(3), pages 575-594.
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