Economic Models as Analogies

Itzhak Gilboa, Andrew Postlewaite, Larry Samuelson () and David Schmeidler
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Larry Samuelson: Department of Economics, Yale University

PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania

Abstract: People often wonder why economists analyze models whose assumptions are known to be false, while economists feel that they learn a great deal 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 analyze models that are “theoretical cases†, which help understand economic problems by drawing analogies between the model and the problem. According to this view, economic models, empirical data, 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 some complexity arguments that explain why case-based reasoning may sometimes be the method of choice; why economists prefer simple examples; and why a paradigm may be useful even if it does not produce theories.

Keywords: Methodology; Case-based reasoning (search for similar items in EconPapers)
JEL-codes: B40 B41 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2011-12-07
New Economics Papers: this item is included in nep-cbe, nep-hpe and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Economic Models as Analogies (2014)
Working Paper: Economic Models as Analogies (2013)
Working Paper: Economic Models as Analogies, Third Version (2013)
Working Paper: Economic Models as Analogies, Second Version (2012)
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