TY - JOUR

T1 - ‘But can't we get the same thing with a standard model?’ rationalizing bounded-rationality models

AU - Spiegler, Ran

PY - 2011

Y1 - 2011

N2 - 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, 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 bounded-rationality models.

AB - 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, 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 bounded-rationality models.

UR - http://www.scopus.com/inward/record.url?scp=80052762036&partnerID=8YFLogxK

U2 - 10.1017/S0266267110000453

DO - 10.1017/S0266267110000453

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AN - SCOPUS:80052762036

SN - 0266-2671

VL - 27

SP - 23

EP - 43

JO - Economics and Philosophy

JF - Economics and Philosophy

IS - 1

ER -