Alexander Linsbichler, Johannes-Kepler-University Linz: "Reasoning with Models in Thought Experiments: Applying Häggqvist's Template to Game Theory and Economics"

A central theme in methodology of economics is reconstructing how economists reason with models (see Sugden 2002, Morgan 2012, Jhun 2021, Linsbichler 2023, and many others). Acknowledging that the role of thought experiments in economics as well as the relation between thought experiments and models are contested (see e.g. Reiss 2016, Thoma 2016), this paper provides an account of reasoning with models as centrepieces of thought experiments.

Numerous thought experiments can be reconstructed as one or more arguments (Norton 2004). More specifically, many thought experiments in philosophy and the natural sciences can even be spelled out by one argument template (Häggqvist 2009). This paper substantiates the applicability of Häggqvist’s template and of its refinement devised by Linsbichler and da Cunha (2023a, 2023b) to economics. Consequently, at least some instances of thought experimenting in economics are compatible with strict empiricism.

According to Häggqvist and applying his template, many thought experiments can be regimented as consisting of four groups of propositions: i) a counterfactual scenario C which the thought experiment describes as possible, ii) a theory T to be tested, iii) the claim that if scenario C were the case, then a state of affairs W would obtain, and finally iv) the claim that T implies that (if C were the case, then W would not obtain). This account of thought experiments can nicely be integrated with the emerging literature on narratives in economics (see e.g. Morgan & Stapleford 2023), since claim iii) is typically made plausible by narratively tracking the development of the scenario C from its starting position to a state of affairs W.

The paper will illustrate the applicability of the template to reasoning with models in economics by interpreting economic models as counterfactual scenarios C of thought experiments (see also Suppes 1960). Thus, the model and its animation do not comprise the entire thought experiment and a model by its own is not yet a thought experiment, but models can be employed as centrepieces of thought experiments. Examples include the paradigmatic case of Schelling’s checkerboard, reasoning with so-called “imaginary constructions” of Austrian economics, and Otto Neurath’s scientific utopianism. Some Neurathian thought experiments prompt conceptual change at the conceptual basis of the discipline of economics in a manner suggested by Kuhn (1964/1977). In particular, Neurath uses thought experiments to advocate irreducibly multidimensional notions of well-being.

Finally, the paper will argue that some instances of reasoning with models in economics do not fit Häggqvist’s template without distortion. What is more, some instances of reasoning with models in economics arguably do not even qualify as thought experiments. The paper briefly discusses the status of such likely counterexamples using paradigmatic cases such as the market for lemons and Robinsonades. Yet, Häggqvist’s proposal might serve as an impetus to construct additional templates to capture other modes of reasoning with models in economics.

References:

Häggqvist, S. (2009). A Model for Thought Experiments. Canadian Journal of Philosophy, 39 (1), pp. 55-76.

Jhun, J. (2021). Modelling the Possible to Modelling the Actual. In J. Reiss & C. Heilmann (eds.), The Routledge Handbook of Philosophy of Economics (pp. 316-326), Routledge.

Kuhn, T. S. (1964/1977). A Function for Thought Experiments. In The Essential Tension (pp. 240-265). The University of Chicago Press.

Linsbichler, A. (2023). Linsbichler, A. (2023). An Ultra-Refined Grammar for Interactions: Thoughts on Robert Aumann’s Philosophy of Game Theory, Revue Économique, accepted.

Linsbichler, A. & da Cunha, I. F. (2023a). Otto Neurath’s Scientific Utopianism Revisited. A Refined Model for Utopias in Thought Experiments, Journal for General Philosophy of Science, online first. DOI: 10.1007/s10838-022-09630-5.

Linsbichler, A. & da Cunha, I. F. (2023b). Science, Imagination and Values in the German Energy Turn: an example of Neurath’s methodology for social technology, under review.

Morgan, M. (2012). The World in the Model. How Economists Work and Think. Cambridge University Press.

Morgan, M. & Stapleford, T. (eds.) (2023). Special Issue on Narratives in the History of Economics, History of Political Economy, forthcoming.

Norton, J. (2004). Why Thought Experiments do not Transcend Empiricism. In C. Hitchcock (ed.), Contemporary Debates in the Philosophy of Science (pp. 44–66), Blackwell.

Reiss, J. (2016). Thought Experiments in Economics and the Role of Coherent Explanations. Studia Metodologiczne, 36, pp. 113-130.

Sugden, R. (2002). Credible worlds: the status of theoretical models in economics. In U. Mäki (ed.), Fact and Fiction in Economics. Models, Realism, and Social Construction (pp. 107-136), Cambridge University Press.

Suppes, P. (1960). A Comparison of the Meaning and Uses of Models in Mathematics and the Empirical Sciences, Synthese, 12 (2), pp. 287-301.

Thoma, J. (2016). On the Hidden Thought Experiments of Economic Theory. Philosophy of the Social Sciences, 46 (2), pp. 129-146.