“Evaluating and Improving Economic Models,” Drew Fudenberg, MIT
BEHAVIORAL SCIENCES WORKSHOP
Abstract: This talk will summarize 3 related papers:
1. “Measuring the Completeness of Economic Models” (2021): Economic models are evaluated by testing the correctness of their predictions. We suggest an additional measure, “completeness”: the fraction of the predictable variation in the data that the model captures.
2. “Predicting and Understanding Initial Play” (2019): We use machine learning to uncover regularities in the initial play of matrix games.
3. “How Flexible is that Functional Form? Quantifying the Restrictiveness of Theories” (2021): We propose a new way to quantify the restrictiveness of an economic model, based on how well the model fits simulated, hypothetical data sets.
Drew Fudenberg is the Paul A. Samuelson Professor of Economics at the Massachusetts Institute of Technology. He is a member of the National Academy of Sciences and the American Academy of Arts and Sciences, and is a past President of the Econometric Society. His research interests include game theory, behavioral economics, decision theory, and experimental economics. He has coauthored four book and many papers.
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Cosponsored by the Center for the Study of American Politics (CSAP) and the School of Management’s International Center for Finance and the Lynne & Andrew Redleaf Foundation.