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. 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. (shrink)

The paper conceptualizes economic models as metaphors. It presents two different approaches to economic modeling. In the first one, economic models are treated as isolations which aim at representing the real world. In the second, they are conceptualized according to various philosophical approaches that are close to fictionalism. The aim of such modeling is to persuade and not to represent. Next, the author tries to escape the dichotomy between models as isolations and models as purely rhetorical devices by referring to (...) N. Cartwright’s understanding of economic models. The issue of their realism is also considered. The final conclusion states that models are very similar to metaphors. (shrink)

This paper supports the literature which argues that derivational robustness can have epistemic import in highly idealized economic models. The defense is based on a particular example from mathematical economic theory, the dynamic Walrasian general equilibrium model. It is argued that derivational robustness first increased and later decreased the credibility of the Walrasian model. The example demonstrates that derivational robustness correctly describes the practices of a particular group of influential economic theorists and provides support for the arguments of philosophers who (...) have offered a general epistemic justification of such practices. (shrink)

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. (shrink)