A Simple Theory of Scientific Learning

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Scientists use diverse evidence to learn about the relative validity of various broad theories. Given the lack of statistical structure in this scientific learning problem, techniques of model selection and meta-analysis are not directly useful as quantitative guides. I use five simplifying assumptions to make the problem tractable by standard statistical methods. Combining Bayesian and frequentist approaches, I derive simple, intuitive rules for updating beliefs. The theory incorporates trade-offs among seemingly incomparable dimensions often used to judge models: ex-ante plausibility, precision, empirical accuracy and general applicability. I establish necessary and sufficient conditions for the consistency of the learning procedure which provide easy robustness checks for applied analysis and a simple algorithm for choosing a robustly consistent trade-off between precision and accuracy. I develop the theory in the context of a motivating application to social preference data collected by Charness and Rabin (2002). In contrast to the authors' analysis, I find (for a wide range of prior beliefs and parameter values) that after taking into account its greater precision, Selfishness is the best model of choice in the simple games they consider.

Keywords: Statistics, Econometrics, Philosophy of Science, Behavioral Economics, Social Preferences, Methodological Theory
Stream: Research Methodologies, Quantitative and Qualitative Methods
Presentation Type: Paper Presentation in English
Paper: Simple Theory of Scientific Learning, A

Eric Glen Weyl

Graduate Student, Department of Economics and Bendheim Center for Finance, Princeton University
Princeton, New Jersey, USA

Eric (E.) Glen Weyl is a candidate for a PhD in economics at Princeton University, after having graduated in June as an undergraduate from Princeton as Valedictorian of his class. Glen’s primary research interests are in pure and applied microeconomic theory, as well as the intersection between economics and other disciplines. His working papers include “The Price Theory of Two-Sided Markets”, which he has presented to economists and policy makers on three continents; “A Simple Theory of Scientific Learning”, which is the core of his dissertation, and “Whose Rights”, which he is currently revising at the request of Politics, Philosophy and Economics. His current projects include a model of the effects of taxation on the allocation of talent through career choice and an extension of the “Simple Theory of Scientific Learning” to a more complex and broadly applicable setting.

Ref: I08P0090