Economic Models as Analogies
People 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.
|Date of creation:||07 Dec 2011|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://economics.sas.upenn.edu/pier
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Guth, Werner & Schmittberger, Rolf & Schwarze, Bernd, 1982. "An experimental analysis of ultimatum bargaining," Journal of Economic Behavior & Organization, Elsevier, vol. 3(4), pages 367-388, December.
- repec:cup:cbooks:9780521802345 is not listed on IDEAS
- Tomasz Strzalecki, .
"Axiomatic Foundations of Multiplier Preferences,"
8239, Harvard University OpenScholar.
- Itzhak Gilboa & Offer Lieberman & David Schmeidler, 2004.
122247000000000684, UCLA Department of Economics.
- Rozen, Kareen, 2008.
"Foundations of Intrinsic Habit Formation,"
40, Yale University, Department of Economics.
- Kareen Rozen, 2008. "Foundations of Intrinsic Habit Formation," Cowles Foundation Discussion Papers 1642R, Cowles Foundation for Research in Economics, Yale University, revised Mar 2009.
- Kareen Rozen, 2008. "Foundations of Intrinsic Habit Formation," Cowles Foundation Discussion Papers 1642, Cowles Foundation for Research in Economics, Yale University.
- Kareen Rozen, 2008. "Foundations of Intrinsic Habit Formation," Levine's Working Paper Archive 122247000000002062, David K. Levine.
- Akerlof, George A, 1970. "The Market for 'Lemons': Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, MIT Press, vol. 84(3), pages 488-500, August.
- repec:cup:cbooks:9780521425230 is not listed on IDEAS
- Uskali Maki, 2005. "Models are experiments, experiments are models," Journal of Economic Methodology, Taylor & Francis Journals, vol. 12(2), pages 303-315.
- Aragones, E. & Gilboa, I. & Postlewaite, A. & Schmeidler, D., 2001.
"Rhetoric and Analogies,"
2001-15, Tel Aviv.
- Enriqueta Aragones & Itzhak Gilboa & Andrew Postlewaite & David Schmeidler, 2013. "Rhetoric and Analogies," UFAE and IAE Working Papers 932.13, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Enriqueta Aragonès & Itzhak Gilboa & Andrew Postlewaite & David Schmeidler, 2013. "Rhetoric and Analogies," Working Papers 706, Barcelona Graduate School of Economics.
- Enriqueta Aragones & Itzhak Gilboa & Andrew Postlewaite & David Schmeidler, 2013. "Rhetoric and Analogies," PIER Working Paper Archive 13-039, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
- repec:cup:cbooks:9780521003117 is not listed on IDEAS
- Till Grune-Yanoff & Paul Schweinzer, 2008. "The roles of stories in applying game theory," Journal of Economic Methodology, Taylor & Francis Journals, vol. 15(2), pages 131-146.
- Fabio Maccheroni & Massimo Marinacci & Aldo Rustichini, 2004.
"Ambiguity Aversion, Robustness, and the Variational Representation of Preferences,"
Carlo Alberto Notebooks
12, Collegio Carlo Alberto, revised 2006.
- Fabio Maccheroni & Massimo Marinacci & Aldo Rustichini, 2006. "Ambiguity Aversion, Robustness, and the Variational Representation of Preferences," Econometrica, Econometric Society, vol. 74(6), pages 1447-1498, November.
- Thomas J. Sargent & LarsPeter Hansen, 2001. "Robust Control and Model Uncertainty," American Economic Review, American Economic Association, vol. 91(2), pages 60-66, May.
- repec:cup:cbooks:9780521415019 is not listed on IDEAS
When requesting a correction, please mention this item's handle: RePEc:pen:papers:12-001. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dolly Guarini)
If references are entirely missing, you can add them using this form.