Even though Popper, Lawson and Mäki are realists, the three of them understand by realism something different and support different positions on the use of models in economics. In this article we will compare the three proposals on their conceptions of reality, the function and the nature of economic models and their use to study the social world.

Choice modellers are frequently criticized for failing to provide accurate representations of the neuro-psychological substrates of decisions. Several authors maintain that recent neuro-psychological findings enable choice modellers to overcome this alleged shortcoming. Some advocate a realistic interpretation of neuro-psychological models of choice, according to which these models posit sub-personal entities with specific neuro-psychological counterparts and characterize those entities accurately. In this article, I articulate and defend three complementary arguments to demonstrate that, contrary to emerging consensus, even the best available neuro-psychological (...) models of choice cannot be justifiably given this realistic interpretation. Moreover, I explicate what challenges will continue to hamper neuro-psychological modellers’ attempts to substantiate a realistic interpretation of their models. In doing so, I draw on the literature on scientific modelling to advance the ongoing philosophical discussion concerning the ontological status of the sub-personal entities posited in distinct decision sciences, the resemblance relations that supposedly connect choice models and the neuro-psychological substrates of decisions, and what conditions these models must satisfy to be regarded as realistic representations of their target systems. (shrink)

Theoretical biology and economics are remarkably similar in their reliance on mathematical models, which attempt to represent real world systems using many idealized assumptions. They are also similar in placing a great emphasis on derivational robustness of modeling results. Recently philosophers of biology and economics have argued that robustness analysis can be a method for confirmation of claims about causal mechanisms, despite the significant reliance of these models on patently false assumptions. We argue that the power of robustness analysis has (...) been greatly exaggerated. It is best regarded as a method of discovery rather than confirmation. (shrink)

Many models in economics are very unrealistic. At the same time, economists put a lot of effort into making their models more realistic. I argue that in many cases, including the Modigliani-Miller irrelevance theorem investigated in this paper, the purpose of this process of concretization is explanatory. When evaluated in combination with their assumptions, a highly unrealistic model may well be true. The purpose of relaxing an unrealistic assumption, then, need not be to move from a false model to a (...) true one. Instead, it may be providing an explanation of some phenomenon by invoking the factor that figures in the assumption. This idea is developed in terms of the contrastive account of explanation. It is argued that economists use highly unrealistic assumptions to determine a contrast that is worth explaining. The process of concretization also motivates new explanatory questions. A high degree of explanatory power, then, may well be due to a high number of unrealistic assumptions. Thus, highly unrealistic models can be powerful explanatory engines. Key Words: concretization • explanation • explanatory power • idealization • model • Modigliani-Miller theorem • unrealistic assumption. (shrink)

This paper is part of the general debate about the need to rethink economics as a human discipline using a heuristic to describe its object, about the need to explicitly reject the positivistic approach in neoclassical economics, and about the urgency to adopt a different methodology, grounded on a realistic set of initial assumptions able to cope with the complexity of the decision making process. The aim of this paper is to show the use of Occam's razor in the economic (...) debate around realism in economic modelling. Occam's razor can be intended as a principle of logic that emphasises simplicity, or as a heuristic tool that emphasises parsimony. Neoclassical economists, such as Samuelson, have explicitly used Occam's razor as a logical principle to highlight the strict logic and simplicity of neoclassical economics; neoclassical models, however, are based on unrealistic assumptions. Some approaches of heterodox economics, au contraire, have used Occam's razor as a powerful heuristic tool to emphasise parsimony, building up models grounded on realistic initial assumptions and capable of embedding complexity into the general explanation of economic behaviour, as in Simon's bounded rationality (1955; 1957) and Hayek's notion of human rationality (1948; 1952; 1974) and cultural and social evolution (1967; 1978). (shrink)

In this contribution, I comment on Raffaella Campaner’s defense of explanatory pluralism in psychiatry (in this volume). In her paper, Campaner focuses primarily on explanatory pluralism in contrast to explanatory reductionism. Furthermore, she distinguishes between pluralists who consider pluralism to be a temporary state on the one hand and pluralists who consider it to be a persisting state on the other hand. I suggest that it would be helpful to distinguish more than those two versions of pluralism – different understandings (...) of explanatory pluralism both within philosophy of science and psychiatry – namely moderate/temporary pluralism, anything goes pluralism, isolationist pluralism, integrative pluralism and interactive pluralism. Next, I discuss the pros and cons of these different understandings of explanatory pluralism. Finally, I raise the question of how to implement or operationalize explanatory pluralism in scientific practice; how to structure the “genuine dialogue” or shape “the pluralistic attitude” Campaner is referring to. As tentative answers, I explore a question-based framework for explanatory pluralism as well as social-epistemological procedures for interaction among competing approaches and explanations. (shrink)

In order to examine the fit between realism and science, one needs to address two issues: the unit of science question (realism about which parts of science?) and the contents of realism question (which realism about science?). Answering these questions is a matter of conceptual and empirical inquiry by way local case studies. Instead of the more ordinary abstract and global scientific realism, what we get is a doubly local scientific realism based on a bottom-up strategy. Representative formulations of the (...) former kind are in terms of the truth and reality of the posits of current science, in terms of warranted belief, in terms of mind-independent unobservable entities. Using illustrations mainly from the social sciences, doubly local scientific realism denies the global applicability of such formulations and seeks to make adjustments in their elements in response to information about local units of science: It is sufficient for a realist to give the existence of an entity (and the truth of a theory) a chance, while in some areas we may be in s position to make justified claims about actual existence (and truth). Logical inquiry-independent existence is sufficient for the social and human sciences, while mind-independence will be fine for many other domains. It should not be insisted that the theoretical posits of realist science be strict unobservables in all areas: most theoretical posits of the social sciences are idealized commonsensibles, such as elements in folk psychology. Unsurprisingly, this sort of local strategy will create space for realism that is able to accommodate larger areas of science without sacrificing traditional realist intuitions. (shrink)

In the methodology of scientific research programs (MSRP) there are important features on the problem of prediction, especially regarding novel facts. In his approach, Imre Lakatos proposed three different levels on prediction: aim, process, and assessment. Chapter 5 pays attention to the characterization of prediction in the methodology of research programs. Thus, it takes into account several features: (1) its pragmatic characterization, (2) the logical perspective as a proposition, (3) the epistemological component, (4) its role in the appraisal of research (...) programs, and (5) its place as a value for scientific research. -/- The notion of “novel facts” is highly relevant in his conception, where several aspects are involved: the directions of novel facts, the different kinds of novelty, and the transition from six possible options of “novel facts” to four choices. Thereafter, the prediction of novel facts as the criterion of appraisal is considered. On the one hand, this requires analyzing the theoretical, empirical, and heuristic possibilities of appraisal; and, on the other, whether there is an overemphasis on the role of prediction in methodology of scientific research programs. As a consequence, there is an analysis of Lakatos’ criterion of appraisal in MSRP and economics. (shrink)