A Pragmatic Reading of Friedman's Methodological Essay and What It Tells Us for the Discussion of ABMs

The issues of empirical calibration of parameter values and functional relationships describing the interactions between the various actors plays an important role in agent based modelling. Agent-based models range from purely theoretical exercises focussing on the patterns in the dynamics of interactions processes to modelling frameworks which are oriented closely at the replication of empirical cases. ABMs are classified in terms of their generality and their use of empirical data. In the literature the recommendation can be found to aim at maximizing both criteria by building so-called 'abductive models'. This is almost the direct opposite of Milton Friedman's famous and provocative methodological credo 'the more significant a theory, the more unrealistic the assumptions'. Most methodologists and philosophers of science have harshly criticised Friedman's essay as inconsistent, wrong and misleading. By presenting arguments for a pragmatic reinterpretation of Friedman's essay, we will show why most of the philosophical critique misses the point. We claim that good simulations have to rely on assumptions, which are adequate for the purpose in hand and those are not necessarily the descriptively accurate ones.Methodology, Agent-Based Modelling, Assumptions, Calibration

Policy Advice Derived from Simulation Models

When advising policy we face the fundamental problem that economic processes are uncertain. Consequently, policy can err. In this paper we show how the use of simulation models can reduce policy errors by inferring empirically reliable and meaningful statements about economic processes. We suggest that policy is best based on so-called abductive simulation models, which help to better understand how policy measures can influence economic processes. We show that abductive simulation models use a combination of theoretical and empirical analysis based on different data sets. By way of example we show what policy can learn with the help of abductive simulation models, namely how policy measures can influence the emergence of a regional cluster.Policy Advice, Simulation Models, Uncertainty, Methodology

The Ethics of the New Economy

Is restructuring an underhanded way to make the rich richer and the poor poorer? Or is it necessary, although bitter, medicine for an ailing economy? In The Ethics of the New Economy: Restructuring and Beyond, professionals from the fields of philosophy, ethics, management, as well as those representing the groups affected by restructuring, tackle thorny ethical issues. Referring to concrete case studies, these timely essays discuss a variety of topics, including justified and unjustified restructuring; employers’ obligations during the restructuring process; equity issues; the rise of part-time employment; the effects of restructuring on communities; the internal risks faced by restructuring corporations; deprofessionalization in health care; the consequences of restructuring in the developing world; philanthropy and cause-related marketing; corporate “judo” and restructuring; and responsible and irresponsible restructuring.https://scholar.uwindsor.ca/philosophybooks/1000/thumbnail.jp