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Mathematics as the role model for neoclassical economics (Blanqui Lecture)

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  • Giocoli, Nicola

Abstract

Born out of the conscious effort to imitate mechanical physics, neoclassical economics ended up in the mid 20th century embracing a purely mathematical notion of rigor as embodied by the axiomatic method. This lecture tries to explain how this could happen, or, why and when the economists’ role model became the mathematician rather than the physicist. According to the standard interpretation, the triumph of axiomatics in modern neoclassical economics can be explained in terms of the discipline’s increasing awareness of its lack of good experimental and observational data, and thus of its intrinsic inability to fully abide by the paradigm of mechanics. Yet this story fails to properly account for the transformation that the word “rigor” itself underwent first and foremost in mathematics as well as for the existence of a specific motivation behind the economists’ decision to pursue the axiomatic route. While the full argument is developed in Giocoli 2003, these pages offer a taste of a (partially) alternative story which begins with the so-called formalist revolution in mathematics, then crosses the economists’ almost innate urge to bring their discipline to the highest possible level of generality and conceptual integrity, and ends with the advent and consolidation of that very core set of methods, tools and ideas that constitute the contemporary image of economics.

Suggested Citation

  • Giocoli, Nicola, 2005. "Mathematics as the role model for neoclassical economics (Blanqui Lecture)," MPRA Paper 33806, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:33806
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    File URL: https://mpra.ub.uni-muenchen.de/33806/1/MPRA_paper_33806.pdf
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    References listed on IDEAS

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    1. Nicola Giocoli, 2003. "History of economics becomes a science for cyborgs," History of Economic Ideas, Fabrizio Serra Editore, Pisa - Roma, vol. 11(2), pages 109-127.
    2. Debreu, Gerard, 1984. "Economic Theory in the Mathematical Mode," American Economic Review, American Economic Association, vol. 74(3), pages 267-278, June.
    3. Nicola Giocoli, 2003. "Modeling Rational Agents," Books, Edward Elgar Publishing, number 2585.
    4. Mirowski,Philip, 2002. "Machine Dreams," Cambridge Books, Cambridge University Press, number 9780521772839, December.
    5. Mirowski,Philip, 2002. "Machine Dreams," Cambridge Books, Cambridge University Press, number 9780521775267, December.
    6. William C. Brainard & Herbert E. Scarf, 2000. "How to Compute Equilibrium Prices in 1891," Cowles Foundation Discussion Papers 1272, Cowles Foundation for Research in Economics, Yale University.
    7. Quiggin, John, 1982. "A theory of anticipated utility," Journal of Economic Behavior & Organization, Elsevier, vol. 3(4), pages 323-343, December.
    8. Smith, Vernon L, 1985. "Experimental Economics: Reply," American Economic Review, American Economic Association, vol. 75(1), pages 264-272, March.
    9. Kahneman, Daniel & Tversky, Amos, 1979. "Prospect Theory: An Analysis of Decision under Risk," Econometrica, Econometric Society, vol. 47(2), pages 263-291, March.
    10. Vernon Smith, 2005. "Hayek and Experimental Economics," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 18(2), pages 135-144, June.
    11. Nicola Giocoli, 2001. "Fixing the point: the contribution of early game theory to the tool-box of modern economics," Journal of Economic Methodology, Taylor & Francis Journals, vol. 10(1), pages 1-39.
    12. Michael V. White, 2004. "In the Lobby of the Energy Hotel: Jevons's Formulation of the Postclassical “Economic Problem”," History of Political Economy, Duke University Press, vol. 36(2), pages 227-271, Summer.
    13. Ortmann, Andreas, 2003. "Charles R. Plott's collected papers on the experimental foundations of economic and political science," Journal of Economic Psychology, Elsevier, vol. 24(4), pages 555-575, August.
    14. Morris Altman, 2004. "The Nobel Prize in behavioral and experimental economics: a contextual and critical appraisal of the contributions of Daniel Kahneman and Cernon Smith," Review of Political Economy, Taylor & Francis Journals, vol. 16(1), pages 3-41.
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    Cited by:

    1. Giocoli, Nicola, 2008. "Three alternative (?) stories on the late 20th-century rise of game theory," MPRA Paper 33808, University Library of Munich, Germany.
    2. Nicola Giocoli, 2014. "Games judges don't play: predatory pricing and strategic reasoning in US antitrust," Supreme Court Economic Review, University of Chicago Press, vol. 21(1), pages 271-330.

    More about this item

    Keywords

    Axiomatic method; formalism; rationality; neoclassical economics;

    JEL classification:

    • B40 - Schools of Economic Thought and Methodology - - Economic Methodology - - - General
    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • B20 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - General

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