'Normative models in economics and finance' by Joe Roussos
21 February 2024, 17:30 CET
Models play a crucial role in both the academic study of economics and finance, and in the application of economic and financial theories in industry. Philosophers of science have made detailed studies of central aspects of modelling, including how models represent the world and how scientists manage the idealisations that are central to modelling. But recognition is growing that models play other roles than the descriptive and representational ones familiar from the study of science. In this talk, Joe Roussos examines how models can be used for normative purposes, for example, to evaluate the goodness of states of affairs or to prescribe how agents ought to act.
The central example for Joe’s talk is decision theory, which underlies much of microeconomics. Joe starts by describing what it means to say that decision theory is normative, and then discusses how decision theory uses models to make normative claims about individual decision-making. A single model can be put to normative or descriptive purposes, depending on the desires of the user. This illustrates how crucial it is to articulate the justifications for the assumptions and idealisations in our models.
An open debate follows the meeting.
Normative models in economics and finance
by Joe Roussos
17:30 CET 21 February 2024
A Phinance Online Seminar
17:30 Joe Roussos (Institute for Futures Studies) Normative models in economics and finance
18:15 Debate
Chair: Emiliano Ippoliti (Sapienza University of Rome)