Abstract

http://ssrn.com/abstract=2209153
 


 



Economic Models as Analogies, Third Version


Itzhak Gilboa


Tel Aviv University - Eitan Berglas School of Economics; HEC Paris - Economics & Decision Sciences

Andrew Postlewaite


University of Pennsylvania - Department of Economics

Larry Samuelson


Yale University

David Schmeidler


Tel Aviv University; Interdisciplinary Center (IDC) Herzliyah; Ohio State University (OSU)

January 27, 2013

PIER Working Paper No. 13-007

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 complexity arguments that explain why case-based reasoning may sometimes be the method of choice and why economists prefer simple cases.

Number of Pages in PDF File: 43

Keywords: Methodology, Case-based reasoning

JEL Classification: B40, B41

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Date posted: January 30, 2013  

Suggested Citation

Gilboa, Itzhak and Postlewaite, Andrew and Samuelson, Larry and Schmeidler, David, Economic Models as Analogies, Third Version (January 27, 2013). PIER Working Paper No. 13-007. Available at SSRN: http://ssrn.com/abstract=2209153 or http://dx.doi.org/10.2139/ssrn.2209153

Contact Information

Itzhak Gilboa
Tel Aviv University - Eitan Berglas School of Economics ( email )
P.O. Box 39040
Ramat Aviv, Tel Aviv, 69978
Israel
972-3-640-6423 (Phone)
972-3-640-9908 (Fax)
HEC Paris (Groupe HEC) - Economics & Decision Sciences
Paris
France
Andrew Postlewaite (Contact Author)
University of Pennsylvania - Department of Economics ( email )
3718 Locust Walk
Philadelphia, PA 19104
United States
215-898-7350 (Phone)
215-573-2057 (Fax)
HOME PAGE: http://www.econ.upenn.edu/~apostlew
Larry Samuelson
Yale University ( email )
30 Hillhouse Avenue
New Haven, CT 06520-8281
United States
David Schmeidler
Tel Aviv University ( email )
P.O. Box 39040
Ramat Aviv, Tel Aviv, 69978
Israel
+972-3-640-9643 (Phone)
+972-3-640-9357 (Fax)
Interdisciplinary Center (IDC) Herzliyah ( email )
Herzliya
Israel
Ohio State University (OSU) ( email )
Blankenship Hall-2010
901 Woody Hayes Drive
Columbus, OH OH 43210
United States
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