jetpack domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /mnt/stor08-wc1-ord1/694335/916773/www.tvhe.co.nz/web/content/wp-includes/functions.php on line 6131updraftplus domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /mnt/stor08-wc1-ord1/694335/916773/www.tvhe.co.nz/web/content/wp-includes/functions.php on line 6131avia_framework domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /mnt/stor08-wc1-ord1/694335/916773/www.tvhe.co.nz/web/content/wp-includes/functions.php on line 61311) I assumed that the comment thread here was about black box modeling more generally rather than ABM – as it started off with Nathaniel discussing what a black box was and you asking about the Lucas Critique, which is where my comments came from. I decided to trust what you said in the post about ABM having explained paths that make it not black box 🙂
2) Indeed.
]]>1) Sure, but not really applicable to ABM
2) Yes, hopefully neuroeconomics can help here. Behavioural stuff just seems to add black-box heuristics.
Black boxes are processes where we have a set of inputs, and we just put those inputs in and outputs magically come out. The way I see it there are two places where this turns up with economists
http://en.wikipedia.org/wiki/Reduced_form
Black boxes in this form also try to see themselves as “theory free”, we are discussing a historical relationship between variables without including structural terms that will show up in the error, or within the parameter estimates of our variables. The process of using time series analysis is well understood – but our conception of the model where choice is being made is not.
The second place is to do with our conception of choice directly – we assume that inputs go into a person and outputs come out, without fully describing the mental process that we undergo. Rational choice, in this way, is more of a black box concept than a true descriptive concept – and it is our determination to move away from this black box conception that helps to make behavioural and experimental economics more popular.
]]>I agree. What I don’t really get is how you can build a model in which you specify the structure and the input data but are unable to provide intuition about the results.
]]>Black boxes don’t satisfy the Lucas critique with such models. As a result, they are useful for raw “description” and for prediction given “unknown” CP clauses (as we should be able to boil down black box models to a structural form with enough effort) and as long as policy rules don’t change given their results.
Black boxes neither explain, nor allow for policy relevant analysis – I see them as akin to reduced form time series models where the structural coefficients are unable to be solved. Useful for framing what has happened, and creating forecasts conditional on things we don’t know.
]]>How do you build a mechanism that you can’t observe while still satisfying the Lucas critique?
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