A defence of absurd theories in economics
Theories that involve plainly false and even bizarre assumptions are argued to have an important role in bundling empirical facts in a way that allows these to be understood, handled and used as modules in the construction of mechanisms by economists with human cognitive limits. Absurd theories are subcomponents used in a valid explanatory strategy as long as the mechanisms only derive the implications of the facts summarised. This provides a defence and explanation of many economic theories, but also imposes hard limits on such theorising.
Nordberg, Morten and Ole Røgeberg
As-if theory, economic methodology, welfare economics
Prosjekt:4101 - Økonomi og helse
The Research Council of Norway