Defence of Absurd Theories in Economics

Morten Nordberg () and Ole Rogeberg
Additional contact information
Morten Nordberg: The Ragnar Frisch Centre for Economic Research, Postal: Gaustadalleen 21, N-0349 Oslo, Norway

No 2003:18, HERO Online Working Paper Series from University of Oslo, Health Economics Research Programme

Abstract: Theories that involve plainly false and even bizarre assumptions are argued to have an important role in bundling empirical facts in a way that allows these to be understood, handled and used as modules in the construction of mechanisms by economists with human cognitive limits. Absurd theories are subcomponents used in a valid explanatory strategy as long as the mechanisms only derive the implications of the facts summarised. This provides a defence and explanation of many economic theories, but also imposes hard limits on such theorising.

Keywords: As-if theory; Economic methodology; welfare economics (search for similar items in EconPapers)
JEL-codes: B41 D00 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2009-06-22
New Economics Papers: this item is included in nep-hpe and nep-neu
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http://www.hero.uio.no/publicat/2003/HERO2003_18.pdf (application/pdf)

Related works:
Journal Article: A defence of absurd theories in economics (2005)
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