Idealization in economics modeling

Demetris Portides

pp. 253-263

in: Hanne Andersen, Dennis Dieks, Thomas Uebel, Wenceslao J. Gonzalez, Gregory Wheeler (eds), New challenges to philosophy of science, Berlin, Springer, 2013

Abstract

I argue that understanding idealization as a conceptual act that can be distinguished into three kinds: isolation, stabilization and decomposition is a promising way for making sense of many important characteristics of economic modeling. All three kinds of idealization involve the conceptual act of variable control which amounts to omission of information. I particularly highlight the point that in addition to isolations and stabilizations an implicit (and occasionally explicit) feature of idealization in economics modeling is decomposition, i.e. the idea that we set apart within our model descriptions clusters of factors that we assume to influence the behavior of the target system by abstracting from the complex natural (or social) convolution of things in the actual world. These features of idealization are explicated with reference to particular examples of scientific models.