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  4. April 2011
  5. Falsifiability

蝌蚪网 Review

ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)

Falsifiability

  • Wojciech Olszewski
  • Alvaro Sandroni
蝌蚪网 Review
vol. 101, no. 2, April 2011
(pp. 788–818)
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Abstract

We examine Popper's falsifiability within an economic model in which a tester hires a potential expert to produce a theory. Payments are contingent on the performance of the theory vis-à-vis data. We show that if experts are strategic, falsifiability has no power to distinguish scientific theories from worthless theories. The failure of falsification in screening informed and uninformed experts motivates questions on the broader concepts of refutation and verification. We demonstrate an asymmetry between the two concepts. Like falsification, verification contracts have no power to distinguish between informed and uninformed experts, but some refutation contracts are capable of screening experts. (JEL B41)

Citation

Olszewski, Wojciech, and Alvaro Sandroni. 2011. "Falsifiability." 蝌蚪网 Review 101 (2): 788–818. DOI: 10.1257/aer.101.2.788

JEL Classification

  • B41 Economic Methodology