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

Abstract

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.

Pleidooi voor een ontwerpgerichte bestuurskunde

“…Als een bestuurskundige via een ontwerpende benadering bruikbare en valide kennis wil ontwikkelen, is het cruciaal dat hij of zij dit enerzijds 'evidence-based' doet, en dus met behulp van betrouwbare kennis en gericht op het produceren van nieuwe kennis. Anderzijds heeft het ontwerpen alleen meerwaarde als er ruimte is voor verbeelding en creativiteit: alleen dan kan er worden gegist naar een plausibele verklaring waarmee het zoekproces naar een werkende oplossing gestart kan worden (Mabsout, 2015). Steen (2013) spreekt over het combineren van inquiry en imagination: onderzoek en verbeeldingskracht.…”

Mining for Unknown Unknowns

“…Second, the latter procedure might be seen as an instance of abduction, a mode of reasoning associated with creativity and the generation of ideas [22,41]. Unlike deduction, which draws the logical ramifications of previously given assertions, or induction, which infers general laws from the observation of recurrent facts, abduction looks for the best justification (which is here a concept of the discovery context) after hitting a singular event (a seed).…”

Ökonomie - Praxis - Subjektivierung

“…103 Im Institutionalismus, wie auch im weiteren Feld der Sozioökonomie, sind rekonstruktive Verfahren im Allgemeinen (Lenger und Kruse 2017) und Typenbildungen im Besonderen ein erprobtes Mittel mit einer langen Tradition (Blosser 2020;Thieme 2015;Kurrild-Klitgaard 2001;J. Finch 1997;Schefold 1994) Mirowski (1987Mirowski ( , 1012, sowie in weiteren ökonomischen Theorieströmungen Mabsout (2015).…”