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Towards a Better Microeconomic Theory

Published online by Cambridge University Press:  01 April 2022

Richard M. Cyert  and
Garrel Pottinger
Richard M. Cyert
Affiliation:
Carnegie-Mellon University
Garrel Pottinger
Affiliation:
Carnegie-Mellon University
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Abstract

We summarize the evidence and arguments usually employed against the use of the profit maximization assumption in microeconomic theory, and then pass directly to the methodological arguments. Two arguments are considered. The first summarizes positions which have been taken by various defenders of the “people who think a theory should be given up just because it is false are naive and confused” view. To rebut this view, we develop a scheme for classifying theoretical assumptions and show that the specious plausibility of the argument in question derives from ignoring the distinctions we have drawn. The second argument attempts to show that a better theory is more likely to be attained by continuing the development of the orthodox theory. We show that this view is mistaken and then discuss steps which have been taken to develop a better theory.

Type
Research Article
Information
Philosophy of Science , Volume 46 , Issue 2 , June 1979 , pp. 204 - 222
Copyright
Copyright © Philosophy of Science Association 1979

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Footnotes

†

This research was supported in part by the National Science Foundation under grant SOC 77-07548. The original draft of this paper was considerably improved by virtue of the comments of two unknown referees and the suggestions of our colleague Alan Anderson. We are grateful for their help.

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