If the major theorems were just viewed as mathematical constructs and if there were none of the potential connection to policy or empirical behavior, do you think the best economics students would still be attracted to the field?

From just one quick look at the blogs by big-name economists, one senses that they may not bother if there weren’t the potential for a grand unified theory (however distant that may be from where the theory is now)…

]]>Amphibians?

]]>Avalaible economic theory/game theoretic models of rational agents takes into account only efficiency awareness (i.e. profit maximization) wich is a very restricted model of the “real” rational agent.

Therefore the two facts you comment in your post (failure of economic theories at predictions, in my experience including microeconomy, and good aplicability to AGT)depends on the same cause and should not surprise anyone.

]]>No, the utility of studying a subject is also the control or manipulation of the subject. Useful predictions is just a small part of utility.

@ anon who writes: “Rationality is beautiful and deserves to be studied for its own sake. That’s why we have game theory and microeconomics.”

You are studying rationality in game theory and microeconomics, you are studying some optimization or maximization devices. Without some analogue of Church’s thesis for rational behavior, there is no conceptual link between the two.

]]>No one would study about cars if they did not take us places, while number theory would be studied purely for interest.

Economic systems are fairly complex and ugly beasts, and not sure they would be studied if not for their utility.

]]>Arrow’s theorem follows from a set of axioms, or assumptions made formal.

The utility of those axioms lies not in being true, mostly true or something like that. They are plausible formal interpretations of intuitions that we have.

Axioms are translations of pre-theoretical ideas which are truth preserving.

Formalization allows us to see underlying sameness in phenomena that we would not have seen but for the formalization.

But, we are not getting closer to Platonic truth with formal models. The necessity in the model may or may not have any relationship to truth outside the model, whether the outside is computers or people in a market.

]]>I believe in the micro-economic theory and also in macro-economic, but I also would not recommend solely dependent on them in a complex situation, since we overlook so many real variables and so many futuristic things always remain uncertain or unknown.

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