Computing the perfect model: Why do economists Shun simulation?

Philosophy of Science 74 (3):304-329 (2007)

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Abstract
Like other mathematically intensive sciences, economics is becoming increasingly computerized. Despite the extent of the computation, however, there is very little true simulation. Simple computation is a form of theory articulation, whereas true simulation is analogous to an experimental procedure. Successful computation is faithful to an underlying mathematical model, whereas successful simulation directly mimics a process or a system. The computer is seen as a legitimate tool in economics only when traditional analytical solutions cannot be derived, i.e., only as a purely computational aid. We argue that true simulation is seldom practiced because it does not fit the conception of understanding inherent in mainstream economics. According to this conception, understanding is constituted by analytical derivation from a set of fundamental economic axioms. We articulate this conception using the concept of economists' perfect model. Since the deductive links between the assumptions and the consequences are not transparent in ‘bottom‐up’ generative microsimulations, microsimulations cannot correspond to the perfect model and economists do not therefore consider them viable candidates for generating theories that enhance economic understanding.
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DOI 10.1086/522359
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References found in this work BETA

Explanatory Unification and the Causal Structure of the World.Philip Kitcher - 1989 - In Philip Kitcher & Wesley Salmon (eds.), Scientific Explanation. Minneapolis: University of Minnesota Press. pp. 410-505.
Scientific Explanation and the Sense of Understanding.J. D. Trout - 2002 - Philosophy of Science 69 (2):212-233.

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Citations of this work BETA

Economic Modelling as Robustness Analysis.J. Kuorikoski, A. Lehtinen & C. Marchionni - 2010 - British Journal for the Philosophy of Science 61 (3):541-567.
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Scientific Understanding: Truth or Dare?Henk W. de Regt - 2015 - Synthese 192 (12):3781-3797.
Simulating Peer Disagreements.Igor Douven - 2010 - Studies in History and Philosophy of Science Part A 41 (2):148-157.
Agent-Based Simulation and Sociological Understanding.Petri Ylikoski - 2014 - Perspectives on Science 22 (3):318-335.

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