Monday, October 13, 2008

Paul Krugman on silly research

Krugman just won the Nobel prize today (or maybe yesterday) for something called "New Trade Theory" that I understand only on the surface. But while browsing the Bible I came across an essay of his where he discusses his "life philosophy."

I love these random articles where influential intellectuals discuss their professional histories and outlooks on life. I'm not sure why--it's probably a mix of envy and post-modern irony. One particularly poignant paragraph is when he discusses the usefullness of what colleagues might call "silly models,"
What seems terribly hard for many economists to accept is that all our models involve silly assumptions. Given what we know about cognitive psychology, utility maximization is a lidicrous concept; equilibrium pretty foolish outside of financial markets; perfect competition a howler for most industries. The reason for making these assumptions is not that they are reasonable but that they seem to help us produce models that are helpful metaphors for things that we think happen in the real world.
In industry, it doesn't matter whether the topic is silly, it only matters if it produces results. In academia, you must paint your interest as non-silly, otherwise it will not be published. So it is heartening to see more academics (besides Robin Hanson) come forward as pro-silly research. When you read the word silly a lot, it starts to look silly itself.