Defending De-idealization in Economic Modeling: A Case Study. Issue 1 (January 2022)

• Record Type: Journal Article
• Authors: Peruzzi, Edoardo; Cevolani, Gustavo
• Other Names: Gotoh Reiko guest-editor.; Yoshida Kei guest-editor.; Cheung Chor-yung guest-editor.; Iorio Francesco Di guest-editor.; Dumouchel Paul guest-editor.; Tamthai Mark guest-editor.; Bouvier Alban guest-editor.; Kaldis Byron guest-editor.; Montuschi Eleonora guest-editor.; Zahle Julie guest-editor.; Zamora-Bonilla Jes´us guest-editor.; Henderson David guest-editor.; Khalifa Kareem guest-editor.; Risjord Mark guest-editor.; Roth Paul guest-editor.; Tollefsen Deborah guest-editor.; Turner Stephen guest-editor.
• Is Part Of: Philosophy of the social sciences. Volume 52:Issue 1/2(2022)
• Page Start: 25
• Page End: 52
• Publication Date: 2022-01
• Subjects: idealization -- de-idealization -- concretization -- economic models -- Bertrand model -- industrial organization; Social sciences -- Periodicals; Social sciences -- Methodology -- Periodicals; Sciences sociales -- Périodiques; Sciences sociales -- Méthodologie -- Périodiques; 300.1
• DOI: 10.1177/00483931211049759
• Languages: English
• ISSNs: 0048-3931

Abstract

This paper defends the viability of de-idealization strategies in economic modeling against recent criticism. De-idealization occurs when an idealized assumption of a theoretical model is replaced with a more realistic one. Recently, some scholars have raised objections against the possibility or fruitfulness of de-idealizing economic models, suggesting that economists do not employ this kind of strategy. We present a detailed case study from the theory of industrial organization, discussing three different models, two of which can be construed as de-idealized versions of the first (the so-called Bertrand model of oligopoly). We conclude that recent pessimism about de-idealization in economics is largely unfounded, and that de-idealization strategies are not only possible but also widely employed in economics.