Although discounting empirical evidence cannot be the right way to solve economic issues, there are still, in my view, a couple of weighty reasons why we perhaps shouldn’t be too enthusiastic about the so-called ‘empirical revolution’ that behavioural economics has brought about in mainstream economics. Behavioural experiments and laboratory research face the same fundamental problem […]
economics
Is it not patently unrealistic to suppose that individuals … base their decision on the size of the expected utility? While entirely natural and understandable, this objection is not strictly relevant … The hypothesis asserts rather that, in making a particular class of decisions, individuals behave as if they calculated and compared expected utility and […]
• Harré, Rom (1960). An introduction to the logic of the sciences. London: Macmillan • Bhaskar, Roy (1978). A realist theory of science. Hassocks: Harvester • Garfinkel, Alan (1981). Forms of explanation: rethinking the questions in social theory. New Haven: Yale U.P. • Lieberson, Stanley (1987). Making it count: the improvement of social research and theory. Berkeley: Univ. […]
I’ll keep this mercifully short. One commenter in my Friday night econ news post asked, in a kind of oblique way, what would I do in this environment. Okay, I’ll play — but not without stating firmly and loudly that I am not dispensing investment advice, nor am I licensed any longer to do so. […]
~by Sean Paul Kelley Good heavens, the economic bad news is piling up like a bad car wreck. So, let’s do some serious rubbernecking, folks, because there is a lot of fucked up shit to watch. Just don’t step in it, okay? We begin with widepsread reports of large institutional investors (hedge funds, investment banks, […]
My new book, Brave New Wild: Can Technology Really Save the Planet? is out and available at/through all fine book stores. And hopefully some disreputable ones too!
Game theory is, like mainstream economics in general, model-oriented. There are many reasons for this – the history of the discipline, ideals borrowed from the natural sciences (especially physics), the search for universality (explaining as much as possible with as little as possible), rigour, precision, and so on. Most mainstream economists and game theorists seek […]
To make a statement about probability in a real world it is necessary to compound the probability derived from the model itself with the probability that the model is itself true. And there is no means of knowing whether the model is true; indeed it is difficult even to attach meaning to the concept ‘the […]
The financial crisis of 2007-2008 took both laypeople and economists by surprise. What went wrong with our macroeconomic models, since they clearly did not foresee the collapse, or even make it conceivable? Many have attempted to answer that question, offering a range of explanations, from the excessive mathematization of economics to irrational and corrupt politicians. […]
What I’d like to capture is the effect of those choices economists make “for convenience,” to be able to reach solutions, to simplify, to ease their work, in short, to make a model tractable. While those assumptions are conventional and meant to be lifted as mathematical, theoretical and empirical skills and technology (hardware and software) […]