Economic models as analogies

Itzhak Gilboa, Andrew Postlewaite, L. Samuelson () and David Schmeidler

Voprosy Ekonomiki, 2015, issue 4

Abstract: People often wonder why economists analyse models whose assumptions are known to be false, while economists feel that they learn a lot 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 analyse modelsthat are ‘theoretical cases′, which help understand economic problems by drawinganalogies between the model and the problem. Thus, economic models, empiricaldata, 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 complexity arguments that explain why case-based reasoning may sometimes be the method of choice and why economists prefer simple cases.

Date: 2015
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Related works:
Journal Article: Economic Models as Analogies (2014)
Working Paper: Economic Models as Analogies (2013)
Working Paper: Economic Models as Analogies (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:nos:voprec:y:2015:id:71

DOI: 10.32609/0042-8736-2015-4-106-130

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