Karl Popper and Economic Methodology: <i>A New Look</i>

Hands, D. Wade

doi:10.1017/s0266267100001905

Cited by 53 publications

(22 citation statements)

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“…Economic methodologists debated at length as to how the economic theory of choice fares in terms of specific criteria of empirical testability (see e.g. Blaug, 1992, ch.4, andHands, 1985, on falsificationist criteria). In this context, several authors criticized economists for displaying "an endemic unwillingness […] to face up to empirical questions" (Sugden, 2001, 128; see also Earl, 2005, 917).…”

Section: Testing Consistency Axiomsmentioning

confidence: 99%

Economics, Psychology, and the Unity of the Decision Sciences

Fumagalli

2015

Philosophy of the Social Sciences

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In recent years, several authors have reconstructed the relationship between 20 th century economic theory and neuro-psychological research in terms of a threestage narrative of initial unity, increasing separation and ongoing reunification. In this article, I draw on major developments in economic theory and neuropsychological research to provide a descriptive and normative critique of this reconstruction. Moreover, I put forward a reconstruction of the relationship between economics and neuro-psychology that, I claim, better fits both the available empirical evidence and the methodological foundations of these disciplines. In doing so, I argue that recent calls to develop a unified interdisciplinary framework for modelling choice are premised on disputable presuppositions concerning both the domain of economic theory and the relationship between this theory's axiomatic foundations and empirical findings about the neuro-psychological substrates of choice.Keywords: Economic Theory; Psychology; Interdisciplinary Unification; Rational Choice; Neuroeconomics. Word Count: 7287 2 IntroductionThe philosophical and methodological literature on the relationship between 20 th century economic theory and neuro-psychological research has grown remarkably during the last three decades (see e.g. Earl, 1990, Giocoli, 2003, Hands, 2010, and Hausman, 1992. Several authors (e.g. Bruni and Sugden, 2007, Camerer and Loewenstein, 2004, and Lewin, 1996 have reconstructed this relationship in terms of the following three-stage narrative (henceforth, the 'standard view'). First, we find an early period of unity, going approximately from the marginal revolution in the 1870s to the 1910s, during which neoclassical economic theory was grounded on psychological foundations. Second, there is a phase of increasing separation, prompted by developments in ordinal utility theory and revealed preference theory, culminated in the 1950s with the elimination of psychological findings, constructs and methods from mainstream economic theory. Finally, the systematic violations of mainstream economic theory documented since the 1950s fostered an ongoing reunification between economics and neuro-psychology, which builds on advances in behavioural, experimental and neuroeconomics to provide a unified interdisciplinary framework for modelling choice. The idea is that economists and neuropsychologists can and should draw on a common set of findings, constructs and methods to model choice (see e.g. Gintis, 2004, Glimcher and Rustichini, 2004, Lewin, 1996, and Rabin, 1998.In this article, I draw on major developments in economic theory and neuropsychological research to provide a descriptive and normative critique of this standard view. Moreover, I put forward a reconstruction of the relationship between economics and neuro-psychology that, I claim, better fits both the available empirical evidence and the methodological foundations of these disciplines. I shall argue for three claims of general interest to the philosophers and the practitioners of ...

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Section: Testing Consistency Axiomsmentioning

confidence: 99%

Economics, Psychology, and the Unity of the Decision Sciences

Fumagalli

2015

Philosophy of the Social Sciences

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“…Despite recognizing the inequality between the views of Lakatos and Popper, Wade seemed intent on pursuing these Lakatosian themes. In 1985 he gives some 'second thoughts on Lakatos' and a 'new look' to Popper and economic methodology [Hands 1985a[Hands , 1985b. Wade asserts that Lakatos' methodology is 'ill-suited' to economics yet it 'can still provide valuable guidance' (i.e.…”

Section: The Company Of Playersmentioning

confidence: 99%

Style vs. Substance in Economic Methodology

Boland

1995

Critical Rationalism, the Social Sciences and the Humanities

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Until recently, economic methodology was never a fruitful research field for an aspiring economist trying to establish a career. The reasons were simple. Methodology was supposed to be written only by successful economists in their retirement years, sharing their wisdom to tell us about the methods they used to succeed. Young, beginning economists were always discouraged on the grounds that they did not know enough, and besides, talk is cheap. Thus in the 1960s, when I began, not only did one face the problem of finding something to discuss from a methodological viewpoint that would interest an ordinary economist, one had to overcome the sociology of the profession. In the last ten or twelve years, things appear to have dramatically changed. Today, almost anyone can hire a hall and put on a methodology play. It seems that today the only decision facing the would-be methodologist is one that involves the selection of the playwright whose script will be performed.The situation facing an aspiring methodologist today is so radically different from the one I faced in the 1960s that communication between me and this new generation is usually very difficult. One would think that given all the current discussion of Karl Popper's views of the philosophy of science that communication ought to be easy but a communication obstacle persists. In this paper I will attempt to explain why this obstacle persists both for me and for anyone who studied Popper's views of the philosophy of science in the early 1960s or earlier. Moreover, I will explain why this obstacle might not be easily overcome. Economic methodology in the 1960sFirst let me begin by describing my situation in the 1960s. Against the expressed wishes of my undergraduate teachers I decided that I would specialize in the study of economic methodology. I do not remember exactly why I became interested in methodology. I do recall that, as a student reading economics, I felt that my understanding did not begin until I was told the aim of the writer and why the writer was proceeding this way rather than that way. But I think my interest in methodology started before I began my career in economics. I remember my decision to drop out of the engineering school in my final year and then my attempts to decide on something else to study.

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“…The kind of amplificatory inference necessary to generate novel scientific ideas was defeasible, he thought, and could not be valid. Popper's contribution to the philosophy of science is more nuanced and complex than his falsification criterion of course since he also develops a sui generis methodology for economics namely that of situational logic (Hands, 1985). However, in situational logic, only the rationality principle defined broadly as individuals behaving in the appropriate or adequate way given the situation they face (Koertge, 1979), had something original to offer economic methodology.…”

Section: Introductionmentioning

confidence: 99%

Abduction and economics: the contributions of Charles Peirce and Herbert Simon

Mabsout

2015

Journal of Economic Methodology

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A constantly changing social reality means economic theories, even if correct today, need to be constantly revised, updated, or abandoned. To maintain an up-to-date understanding of its subject matter, economists have to continuously assess their theories even those that appear to be empirically corroborated. Economics could gain from a method that describes and is capable of generating novel explanatory hypotheses. A pessimistic view on the existence of such a method was famously articulated by Karl Popper in The Logic of Scientific Discovery. He wrote 'there is no such a thing as a logical method of having ideas or a logical reconstruction of this process.' Herbert Simon responded to Popper and argued the opposite, namely, that there is a model of discovery and its name is abduction. Simon acknowledges his debt to Charles Peirce -the first modern logician to explicitly formulate a theory of abduction -and explains that abduction is a model of discovery that works as a problem-solving heuristic encoded in a computer program. Although Simon's account of a model of discovery was prescient, Peirce's description of abduction as loose inference is incompatible with an exclusive algorithmic operationalization. The paper also connects Peirce's abduction to explanation in economics and the economic literature on uncertainty. It is argued that explanation, uncertainty, and abduction complement each other and their combination is valuable to economics.

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Karl Popper and Economic Methodology: A New Look

Cited by 53 publications

References 22 publications

Economics, Psychology, and the Unity of the Decision Sciences

Economics, Psychology, and the Unity of the Decision Sciences

Style vs. Substance in Economic Methodology

Abduction and economics: the contributions of Charles Peirce and Herbert Simon

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