In this article, I aim at showing how powers may ground different types of probability in the universe. In Section 1 I single out several dimensions along which the probability of something can be determined. Each of such dimensions can be further specified at the type-level or at the token-level. In Section 2 I introduce some metaphysical assumptions about powers. In Section 3 I show how powers can ground single-case probabilities and frequency-probabilities in a deterministic setting. Later on, in Section (...) 4, I move to a theoretical framework where the falsity of determinism is assumed. Within such a framework, I first argue that some probabilities are grounded on basic powers. Moreover, in Section 5, I introduce tendencies and suggest that they are endowed with specific degrees of activation that may change over time. Such degrees explain why tendencies are more likely to be activated than non-activated, or vice versa. In Section 6 I compare my account of tendencies with other accounts. Finally, in Section 7, I anticipate some general objections against my account – objections that it shares with propensity-accounts of probability – and against degrees of activation of tendencies. (shrink)

As the title of this essay suggests, my concern is with the issue of what are economic models. However, the goal of the paper is not to offer an in-depth study on multiple approaches to modelling in economics, but rather to overcome the dichotomical divide between conceptualizing models as isolations and constructions. This is done by introducing the idea of economic models as believable worlds, precisely descriptions of mechanisms that refer to the essentials of the modelled targets. In doing so (...) I make use of the Woodward’s (2002) conceptualization of mechanisms. It is shown that such models do not offer the perfectly true descriptions of the actual world but justified beliefs about the modelled, precisely they aim at maximizing truth and minimizing falsity in a large body of belief about the real world. The analysis throughout the paper is supported by in-depth examination of the Varian’s (1980) model of sales that is here treated as a representative way of reasoning in neoclassical economics. (shrink)

Mill (1872, 1874) is an early proponent of the thesis that economics has a special domain in which it can operate relatively independently of findings from other sciences. Contra Mill, I argue that this so-called separateness-thesis is best defendedunder an externalist interpretation of Rational Choice Theory (RCT). Mill’s defence is consistent with an internalist interpretation of RCT. Internalism holds that RCT depicts psychological mechanisms operating in economic agents. I argue that such a defence fails to establish separateness, because it makes (...) economics highly depended on psychological findings. However, externalism understands RCT as an adequate description of how agents react to incentives if certain environmental structures are present. Under this interpretation, we can defend separateness by investigating which features of an environmental structure will lead agents to behave in accordance with RCT. Thereby, we can derive indicators that enable us to demarcate a separate domain for economics. (shrink)