Spiegler, Ran (2010): "But Can't we Get the Same Thing with a Standard Model?" Rationalizing Bounded-Rationality Models.
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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.
|Item Type:||MPRA Paper|
|Original Title:||"But Can't we Get the Same Thing with a Standard Model?" Rationalizing Bounded-Rationality Models|
|Keywords:||Bounded rationality, methodology, theory selection, rationalizations|
|Subjects:||D - Microeconomics > D0 - General > D03 - Behavioral Economics; Underlying Principles
B - History of Economic Thought, Methodology, and Heterodox Approaches > B4 - Economic Methodology > B49 - Other
|Depositing User:||ran spiegler|
|Date Deposited:||16. Mar 2010 15:15|
|Last Modified:||12. Feb 2013 18:22|
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