Journal of Political Economy Vol. 130 No. 4 2022
Measuring the Completeness of Economic Models
open access
Abstract
Economic models are evaluated by testing the correctness of their predictions. We suggest an additional measure, “completeness”: the fraction of the predictable variation in the data that the model captures. We calculate the completeness of prominent models in three problems from experimental economics: assigning certainty equivalents to lotteries, predicting initial play in games, and predicting human generation of random sequences. The completeness measure reveals new insights about these models, including how much room there is for improving their predictions.
- DOI
- 10.1086/718371
- Volume
- 130
- Issue
- 4
- Pages
- 956-990
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref