Excessive Ambitions

Datos Bibliográficos

ID8246735
AutoresJon Elster (0000-0002-9543-1780, autor de correspondencia)
Año2009
Volumen4
Número2
Fecha de publicación2009-01-08
Peer ReviewedSí
Open AccessNo
TipoARTICLE
RevistaCapitalism and Society (JOURNAL)
Identificadores de la revistaISSN: 1932-0213 • E-ISSN: 2194-6140
EditorialWalter de Gruyter GmbH (PUBLISHER • DE)
DOI10.2202/1932-0213.1055
OpenAlexW4232782240
IdiomaEN
Citas recibidas17
Referencias citadas5

The current financial crisis has brought out a fatal flaw in the foundations of the economic theories that guided economic agents and regulators: the unwarranted claim to precision and robustness. In this article I try to diagnose this flaw and discuss possible remedies. I argue that actual agents are intrinsically less sophisticated than the models assume they are, and that the various proposals to sustain the models by appealing to "as-if rationality" all fail. I next consider behavioral economics as an alternative to the standard models, claiming that while they may allow for successful retrodiction, they do not hold out much promise for prediction. I also discuss the use of statistical models, arguing that they are subject to so many traps and pitfalls that only a handful of elite practitioners can be trusted to use them well. Finally, I offer some speculations to explain the persistence in the economic profession and elsewhere of these useless or harmful models

Business · Economics · Elite · Law and economics · Management science · Political science · Politics · Positive economics · Rationality · Risk analysis (engineering · Robustness (evolution · Subject (documents · Climate Change Policy and Economics · Computer Science · Law · Market Dynamics and Volatility · Monetary Policy and Economic Impact