Abstract
A general framework is given to analyze the falsifiability of economic models based on a sample of their observable components. It is shown that, when the restrictions implied by the economic theory are insufficient to identify the unknown quantities of the structure, the duality of optimal transportation with zero-one cost function delivers interpretable and operational formulations of the hypothesis of specification correctness from which tests can be constructed to falsify the model.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 355-374 |
| Number of pages | 20 |
| Journal | Economic Theory |
| Volume | 42 |
| Issue number | 2 |
| DOIs | |
| State | Published - Nov 2009 |
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Keywords
- Incompletely specified models
- Optimal transportation
ASJC Scopus subject areas
- Economics and Econometrics
Cite this
Optimal transportation and the falsifiability of incompletely specified economic models. / Ekeland, Ivar; Galichon, Alfred; Henry, Marc.
In: Economic Theory, Vol. 42, No. 2, 11.2009, p. 355-374.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - Optimal transportation and the falsifiability of incompletely specified economic models
AU - Ekeland, Ivar
AU - Galichon, Alfred
AU - Henry, Marc
PY - 2009/11
Y1 - 2009/11
N2 - A general framework is given to analyze the falsifiability of economic models based on a sample of their observable components. It is shown that, when the restrictions implied by the economic theory are insufficient to identify the unknown quantities of the structure, the duality of optimal transportation with zero-one cost function delivers interpretable and operational formulations of the hypothesis of specification correctness from which tests can be constructed to falsify the model.
AB - A general framework is given to analyze the falsifiability of economic models based on a sample of their observable components. It is shown that, when the restrictions implied by the economic theory are insufficient to identify the unknown quantities of the structure, the duality of optimal transportation with zero-one cost function delivers interpretable and operational formulations of the hypothesis of specification correctness from which tests can be constructed to falsify the model.
KW - Incompletely specified models
KW - Optimal transportation
UR - http://www.scopus.com/inward/record.url?scp=75749088448&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=75749088448&partnerID=8YFLogxK
U2 - 10.1007/s00199-008-0432-y
DO - 10.1007/s00199-008-0432-y
M3 - Article
AN - SCOPUS:75749088448
VL - 42
SP - 355
EP - 374
JO - Economic Theory
JF - Economic Theory
SN - 0938-2259
IS - 2
ER -