Lars P. Syll

Think you’re rational? Better think twice! My friend Ben says that on the first day he got the following sequence of Heads and Tails when tossing a coin: H H H H H H H H H H And on the second day he says that he got the following sequence: H T T H H T T H T H Which day-report makes you suspicious? Most people I ask this question says the first day-report looks suspicious. But actually both days are equally probable! Every time you toss a (fair) coin there is the same probability (50 %) of...

Dani Rodrik on behavioural challenges (VIII) How would you react if a renowned physicist, say Richard Feynman, was telling you that sometimes force is proportional to acceleration and at other times it is proportional to acceleration squared? I guess you would be unimpressed. But actually, what Dani Rodrik does in Economics Rules amounts to the same strange thing when it comes to theory development and model modification. In mainstream neoclassical theory preferences are standardly...

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 [embedded content] Jussi — still no. 1!

Dani Rodrik and the ’empirical turn’ in economics (VII) In Economics Rules, Dani Rodrik maintains that ‘imaginative empirical methods’ — such as game theoretical applications, natural experiments, field experiments, lab experiments, RCTs — can help us to answer questions conerning the external validity of economic models. In Rodrik’s view they are more or less tests of ‘an underlying economic model’ and enable economists to make the right selection from the ever expanding ‘collection of...

Confusing mathematical masturbation with intercourse between research and reality No real problem worth solving can be solved without some basic research. Therefore the engagement of faculty and students on real problems yields basic research problems whose solutions are of practical significance. Furthermore, the validity of these solutions can be tested in the most effective way known: in application. This avoids one’s confusing mathematical masturbation with intercourse between research...

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Dani Rodrik on math and models (VI) According to Dani Rodrik — as argued in Economics Rules — an economic model basically consists of ‘clearly stated assumptions and behavioral mechansisms” that easily lend themselves to mathematical treatment. Furthermore, Rodrik thinks that the usual critique against the use of mathematics in economics is wrong-headed. Math only plays an instrumental role in economic models: First, math ensures that the elements of a model … are stated clearly and are...

Bootstrapping and The Münchhausen Trilemma The Münchhausen Trilemma is a term used in epistemology to stress the impossibility to prove any truth even in the fields of logic and mathematics. The name Münchhausen Trilemma was coined by the German philosopher Hans Albert in 1968 in reference to a Trilemma of “dogmatism vs. infinite regress vs. psychologism” used by Karl Popper; it is a reference to the problem of “bootstrapping”, after the story of Baron Münchhausen, pulling himself and the...

Dani Rodrik and not so transparent user’s guides to models (V) In Dani Rodrik’s Economics Rules it is argud that ‘the multiplicity of models is economics’ strength,’ and that a science that has a different model for everything is non-problematic, since economic models are cases that come with explicit user’s guides — teaching notes on how to apply them. That’s because they are transparent about their critical assumptions and behavioral mechanisms. Hmm … That really is at odds with yours...