Drew Fudenberg, Wayne Gao, Annie Liang
arXiv 17 Jul 2020 · Theoretical Economics · publishedThe Review of Economics and Statistics (2023) · 10 citations (OpenAlex)
arXiv:2007.09213 · PDF · DOI · OpenAlex · Extracted main text
We propose a restrictiveness measure for economic models based on how well they fit synthetic data from a pre-defined class. This measure, together with a measure for how well the model fits real data, outlines a Pareto frontier, where models that rule out more regularities, yet capture the regularities that are present in real data, are preferred. To illustrate our approach, we evaluate the restrictiveness of popular models in two laboratory settings -- certainty equivalents and initial play -- and in one field setting -- takeup of microfinance in Indian villages. The restrictiveness measure reveals new insights about each of the models, including that some economic models with only a few parameters are very flexible.
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The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.
| Reference | Intensity | Mentions | Sections | Main text | |
|---|---|---|---|---|---|
| 1 | Selten, R (1991) Properties for a Measure of Predictive Success | 1.000 | 7 | 3 | 100% |
| 2 | Bruhin, A., H. Fehr-Duda, and T. Epper (2010) Risk and Rationality: Uncovering Heterogeneity in Probability Distortion | 0.969 | 11 | 3 | 91% |
| 3 | Fudenberg, D., J. Kleinberg, A. Liang, and S. Mullainathan (2022) Measuring the Completeness of Economic Models self | 0.941 | 6 | 4 | 83% |
| 4 | Fudenberg, D. and A. Liang (2019) Predicting and Understanding Initial Play self | 0.874 | 5 | 2 | 100% |
| 5 | Wright, J. R. and K. Leyton-Brown (2014) Level-0 meta-models for predicting human behavior in games | 0.811 | 4 | 2 | 100% |
| 6 | Banerjee, A., A. G. Chandrasekhar, E. Duflo, and M. O. Jackson (2013) The diffusion of microfinance | 0.737 | 3 | 2 | 100% |
| 7 | Banerjee, A., A. G. Chandrasekhar, E. Duflo, and M. O. Jackson (2019) Using gossips to spread information: Theory and evidence from two randomized controlled trials | 0.737 | 3 | 2 | 100% |
| 8 | Gul, F (1991) A Theory of Disappointment Aversion | 0.737 | 3 | 2 | 100% |
| 9 | Tversky, A. and D. Kahneman (1992) Advances in Prospect Theory: Cumulative Representation of Uncertainty | 0.644 | 2 | 2 | 100% |
| 10 | Camerer, C. F., T.-H. Ho, and J.-K. Chong (2004) A cognitive hierarchy model of games | 0.644 | 2 | 2 | 100% |
Showing the top 10 of 54 scored citations.
arXiv econ.EM papers that cite this one, ranked by how heavily they lean on it.
| Citing paper | Intensity | Mentions | Sections | |
|---|---|---|---|---|
| 1 | From Predictive Algorithms to Automatic Generation of Anomalies | 0.644 | 2 | 2 |
| 2 | The Transfer Performance of Economic Models | 0.585 | 3 | 1 |
| 3 | Hedonic Habits: The Empirical Content of Dynamic Hedonic Models | 0.511 | 2 | 2 |