Progress in Economics: Lessons from the Spectrum Auctions

Abstract

This article begins by surveying existing work on scientific models, with an eye to the specific case of economics. It reviews four accounts in particular—the satisfaction-of-assumptions account, the capacities account, the credible-worlds account, and the partial-structures account. It tells the detailed story of the 1994 Federal Communications Commission (FCC) spectrum auction in the United States, highlighting the crucial role of experiment as well as theory. In the light of this case study, this article presents its own open-formula account of economic models. It then turns to the issue of economic progress. Finally, it concludes that empirical progress in economic theory might not be discussed here, or at least that the success of the spectrum auction provides no warrant for doing so. Rather, progress is better seen as more akin to the worthy but piecemeal variety typical of engineering.

Buyer beware: robustness analyses in economics and biology

“…For reasons to reject these views seeCartwright (2009), Gruene-Yanoff (2009),Alexandrova (2008),Northcott (2009), andOdenbaugh (2006). 11 See Al Roth, the father of design economics (among many others, of course) on the complex mixture of methods that goes into successful applied economics (Roth 2002).…”

The explanation paradox redux

“…In earlier work (e.g. Alexandrova, 2008;Alexandrova & Northcott, 2009), they indeed give such an alternative account. The account holds, essentially, that models play a heuristic role in the preparation of experiments: they provide causal hypotheses which are to be subjected to further empirical testing.…”

Empirical Philosophy of Science

“…The pragmatic accounts of models-e.g., models as "open formulae" or "raw materials" (Alexandrova 2008(Alexandrova , 2009), as "epistemic objects" (Boon and Knuuttila 2009;Knuuttila 2011), as "mediators" (Morrison and Morgan 1999) or "boundary objects" (Star and Griesemer 1989)-suggest that there are some useful approaches to the justification of model use in cases where the traditional concepts of idealization and representation do not apply. However, all of the pragmatic accounts mentioned here focus on the epistemic function of models.…”

“…Additionally, the success of models and scientific progress should be more generally grasped as an empirical context-depending issue (also Alexandrova and Northcott 2009).…”