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Defence of Absurd Theories in Economics

Author

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  • Nordberg, Morten

    (The Ragnar Frisch Centre for Economic Research)

  • Røgeberg, Ole Jørgen

    (The Ragnar Frisch Centre for Economic Research)

Abstract

Theories 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.

Suggested Citation

  • Nordberg, Morten & Røgeberg, Ole Jørgen, 2009. "Defence of Absurd Theories in Economics," HERO Online Working Paper Series 2003:18, University of Oslo, Health Economics Research Programme.
    • Handle: RePEc:hhs:oslohe:2003_018
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    File URL: http://www.hero.uio.no/publicat/2003/HERO2003_18.pdf
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    References listed on IDEAS

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    Cited by:

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    2. Nicola Matteucci & Silvio Minnetti & Paolo Nanni, 2016. "Economia civile e gioco d?azzardo: la rete Slot Mob e l?esperienza delle Marche," PRISMA Economia - Societ? - Lavoro, FrancoAngeli Editore, vol. 2016(3), pages 168-191.

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    More about this item

    Keywords

    As-if theory; Economic methodology; welfare economics;
    All these keywords.

    JEL classification:

    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • D00 - Microeconomics - - General - - - General

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