Approximate Truth in Economic Modelling

Geoffrey Brennan, Werner Güth () and Hartmut Kliemt

Discussion Papers on Strategic Interaction from Max Planck Institute of Economics, Strategic Interaction Group

Abstract: Economic intuitions concerning rational behaviour in interactive social situations are shaped by idealized models which are regarded as "approximately true". But ideal models cannot be meaningfully deemed approximately true unless asymptotically convergent processes imply them as limit cases. We illustrate by various examples - infinitely patient customers on durable monopoly markets, homogeneity of commodities, super-games etc. - how this necessary methodological requirement is almost routinely neglected. On this basis we draw some conclusions concerning the continuity between abstract and less abstract models on the one and the world modelled by them on the other hand.

New Economics Papers: this item is included in nep-evo and nep-hpe
Date: 2004-11
View list of references

Downloads: (external link)
ftp://papers.mpiew-jena.mpg.de/esi/discussionpapers/2004-38.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Access Statistics for this paper

More papers in Discussion Papers on Strategic Interaction from Max Planck Institute of Economics, Strategic Interaction Group
Contact information at EDIRC.
Series data maintained by Karin Richter ().