Alvaro Sandroni () and
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Alvaro Sandroni: Department of Economics, University of Pennsylvania
PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania
We examine the fundamental concept of Popperâ€™s falsifiability within an economic model in which a tester hires a potential expert to produce a theory. Payments are made contingent on the performance of the theory vis-a-vis future realizations of the data. We show that if experts are strategic, then falsifiability has no power to distinguish legitimate scientific theories from worthless theories. We also show that even if experts are strategic there are alternative criteria that can distinguish legitimate from worthless theories.
Keywords: Testing; Strategic; Experts (search for similar items in EconPapers)
JEL-codes: D81 C11 (search for similar items in EconPapers)
Pages: 26 pages
New Economics Papers: this item is included in nep-cta and nep-hpe
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Persistent link: https://EconPapers.repec.org/RePEc:pen:papers:08-016
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