"But Can't we Get the Same Thing with a Standard Model?" Rationalizing Bounded-Rationality Models

Ran Spiegler ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper discusses a common criticism of economic models that depart from the standard rational-choice paradigm - namely, that the phenomena addressed by such models can be "rationalized" by some standard model. I criticize this criterion for evaluating bounded-rationality models. Using a market model with boundedly rational consumers due to Spiegler (2006a) as a test case, I show that even when it initially appears that a bounded-rationality model can be rationalized by a standard model, the rationalizing models tend to come with unwarranted "extra baggage". I conclude that we should impose a greater burden of proof on rationalizations that are offered in refutation of such models.

Keywords: Bounded rationality; methodology; theory selection; rationalizations (search for similar items in EconPapers)
JEL-codes: B49 D03 (search for similar items in EconPapers)
Date: 2010-03-15
New Economics Papers: this item is included in nep-evo and nep-hpe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: ‘BUT CAN'T WE GET THE SAME THING WITH A STANDARD MODEL?’ RATIONALIZING BOUNDED-RATIONALITY MODELS (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:21428

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