Most scientific models are not physical objects, and this raises important questions. What sort of entity are models, what is truth in a model, and how do we learn about models? In this paper I argue that models share important aspects in common with literary fiction, and that therefore theories of fiction can be brought to bear on these questions. In particular, I argue that the pretence theory as developed by Walton (1990, Mimesis as make-believe: on the foundations of the (...) representational arts. Harvard University Press, Cambridge/MA) has the resources to answer these questions. I introduce this account, outline the answers that it offers, and develop a general picture of scientific modelling based on it. (shrink)

The thesis is a philosophical analysis of the consumption based capital asset pricing model, investigating in particular its epistemological and methodological foundations. Financial markets are integral parts of advanced and developing economies. They matter because they channel unspent household income into banks’ savings accounts and assets such as bonds and stocks. Financial economists have traditionally taken interest in the pricing mechanism that underlies this capital allocation. The consumption based capital asset pricing model is a prominent effort to describe, explain and (...) predict such prices. It tells a story of investors’ trade-off between consumption now and later and which portfolio of assets to hold. The CCAPM based narrative intuitively makes sense, and the chosen methodology involving theoretical assumption, mathematical models and empirical tests follows the professions’ standards of good scientific practise. But does CCAPM’s research programme provide knowledge for use? My thesis seeks to answer this question in a novel way. Instead of embarking on yet another asset pricing research project, I let Philosophy of Science inform my analysis. Following a “primer” introducing essential CCAPM topics and notations, I discuss, in turn, its theoretical foundation, mathematical model, and empirical test results from a philosophy of science perspective. I find that a few fundamental principles and several auxiliary assumptions combine to develop a simplified, partial and idealized theory of investors, financial markets and assets. The model reflects and represents this theory but also makes narrow claims that are distances away from the real situations they target. Unsurprisingly, ideal model assertions fail standard statistical tests of significance. I conclude that mathematical deductive modelling rooted in orthodox, a priori based fundamental principles create ideal and fictional settings that limit their scope and portability. The development of even more granular models within this orthodox paradigm that searches for “event regularities” will not render the desired knowledge for use. The real situations are possibly too complex to be captured in simplified assumptions, ideal theories and mathematical structures. Novel methodological and ontological approaches to asset pricing are in demand. Hence, claims about tendencies in the real data might replace the current focus on point-forecasts. (shrink)

The problem of cooperation for rational actors comprises two sub problems: the problem of the intentional object (under what description does each actor perceive the situation?) and the problem of common knowledge for finite minds (how much belief iteration is required?). I will argue that subdoxastic signalling can solve the problem of the intentional object as long as this is confined to a simple coordination problem. In a more complex environment like an assurance game signals may become unreliable. Mutual beliefs (...) can then bolster the earlier attained equilibrium. I will first address these two problems by means of an example, in order to draw some more general lessons about combining evolutionary theory and rationality later on. (shrink)

This is a comprehensive anthology of works concerning the nature of economics as a science, including classic texts and essays exploring specific branches and schools of economics. Apart from the classics, most of the selections in the third edition are new, as are the introduction and bibliography. No other anthology spans the whole field and offers a comprehensive introduction to questions about economic methodology.

Scientific discourse is rife with passages that appear to be ordinary descriptions of systems of interest in a particular discipline. Equally, the pages of textbooks and journals are filled with discussions of the properties and the behavior of those systems. Students of mechanics investigate at length the dynamical properties of a system consisting of two or three spinning spheres with homogenous mass distributions gravitationally interacting only with each other. Population biologists study the evolution of one species procreating at a constant (...) rate in an isolated ecosystem. And when studying the exchange of goods, economists consider a situation in which there are only two goods, two perfectly rational agents, no restrictions on available information, no transaction costs, no money, and dealings are done immediately. Their surface structure notwithstanding, no competent scientist would mistake descriptions of such systems as descriptions of an actual system: we know very well that there are no such systems. These descriptions are descriptions of a model-system, and scientists use model-systems to represent parts or aspects of the world they are interested in. Following common practice, I refer to those parts or aspects as target-systems. What are we to make of this? Is discourse about such models merely a picturesque and ultimately dispensable façon de parler? This was the view of some early twentieth century philosophers. Duhem (1906) famously guarded against confusing model building with scientific theorizing and argued that model building has no real place in science, beyond a minor heuristic role. The aim of science was, instead, to construct theories, with theories understood as classificatory or representative structures systematically presented and formulated in precise symbolic.. (shrink)

Graeme Earl's paper on computer graphic modeling in archaeology raises many themes of interest for the philosopher of science, although, as is to be expected of complex social and technical disciplinary practices, these philosophical issues are not to be easily separated or neatly labeled. On the one hand, the modeling practices and concerns of the archaeologists dispute (or even disrupt) the philosophers' traditional notions, while the formers' reective commentaries offer sophisticated analyses that go beyond the latters' traditional reflections on models. (...) On the other hand, the paper raises new questions about how human and social scientists—as humans with social lives—engage with models in their different .. (shrink)

Understanding scientific modelling can be divided into two sub-projects: analysing what model-systems are, and understanding how they are used to represent something beyond themselves. The first is a prerequisite for the second: we can only start analysing how representation works once we understand the intrinsic character of the vehicle that does the representing. Coming to terms with this issue is the project of the first half of this chapter. My central contention is that models are akin to places and characters (...) of literary fictions, and that therefore theories of fiction play an essential role in explaining the nature of model-systems. This sets the agenda. Section 2 provides a statement of this view, which I label the fiction view of model-systems, and argues for its prima facie plausibility. Section 3 presents a defence of this view against its main rival, the structuralist conception of models. In Section 4 I develop an account of model-systems as imagined objects on the basis of the so-called pretence theory of fiction. This theory needs to be discussed in great detail for two reasons. First, developing an acceptable account of imagined objects is mandatory to make the fiction view acceptable, and I will show that the pretence theory has the resources to achieve this goal. Second, the term ‘representation’ is ambiguous; in fact, there are two very different relations that are commonly called ‘representation’ and a conflation between the two is the root of some of the problems that beset scientific representation. Pretence theory provides us with the conceptual resources to articulate these two different forms of representation, which I call p-representation and t-representation respectively. Putting these elements together provides us with a coherent overall picture of scientific modelling, which I develop in Section 5. (shrink)

Counterfactuals abound in science, especially when reasoning about and with models. This often requires entertaining counterfactual conditionals with nomologically or metaphysically impossible antecedents, namely, counternomics or counterpossibles. In this paper I defend the make-believe view of scientific counterfactuals, a naturalised fiction-based account of counterfactuals in science which provides a means to evaluate their meanings independently of the possibility of the states of affairs their antecedents describe, and under which they have non-trivial truth-values. Fiction is here understood as imagination (in contrast (...) with its most typical association with falsity), characterised as a propositional attitude of pretense or ‘make-believe’ (Walton 1990). The application of this theory to scientific counterfactuals makes their evaluation a game of make-believe: a counterfactual is (fictionally) true iff its antecedent and the rules of the game prescribe the imagining of its consequent (Kimpton-Nye 2020). The result is a practice-based account of counterfactuals and counterfactual reasoning in science which incorporates insights from theoretical and experimental analytic philosophy as well as cognitive science. This way, the make-believe view of scientific counterfactuals shows that the evaluation of scientific counterfactuals is none other than a question of scientific representation in disguise. (shrink)