The Positive Economics of Methodology

56 Pages Posted: 27 Jun 2007

See all articles by Steve Landsburg

Steve Landsburg

affiliation not provided to SSRN

Alan C. Stockman

University of Rochester - Department of Economics; National Bureau of Economic Research (NBER)

Thomas Juster

University of Oxford

Date Written: November 1989

Abstract

Does an observation constitute stronger evidence for a theory if it was made after rather than before the theory was formulated, when it may have influenced the theory's construction? Philosophers have discussed this question (of "novel confirmation") but have lacked a formal model of scientific research and incentives. The question applies to all types of research. One example in economics involves evaluating models constructed on the basis of VARs (where a researcher looks at evidence and then constructs a theory) versus structural models with formal econometric tests (where a model is constructed before some of the evidence on it is obtained). This paper develops a simple model of scientific research. It discusses the issues that affect the answer to this question of the timing and theory-construction and observation or experimentation. We also address issues of social versus private incentives in the choice of research strategies, and of socially optimal rewards for researchers in the presence of information and incentive constraints.

Suggested Citation

Landsburg, Steve and Stockman, Alan C. and Juster, Thomas, The Positive Economics of Methodology (November 1989). NBER Working Paper No. t0082. Available at SSRN: https://ssrn.com/abstract=994515

Steve Landsburg

affiliation not provided to SSRN

No Address Available

Alan C. Stockman

University of Rochester - Department of Economics ( email )

Harkness Hall
Rochester, NY 14627
United States
585-275-7214 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Thomas Juster

University of Oxford

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