TY - JOUR
T1 - Measuring the Completeness of Economic Models
AU - Fudenberg, Drew
AU - Kleinberg, Jon
AU - Liang, Annie
AU - Mullainathan, Sendhil
N1 - Funding Information:
are also grateful to Adrian Bruhin, Helga Fehr-Duda, Thomas Epper, Kevin Leyton-Brown, and James Wright for sharing data with us, and we are grateful for financial support from National Science Foundation grants SES 1643517, 1851629, and 195105. Data are provided as supplementary material online. This paper was edited by Emir Kamenica.
Publisher Copyright:
© 2022 The University of Chicago. All rights reserved.
PY - 2022/4
Y1 - 2022/4
N2 - 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.
AB - 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.
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U2 - 10.1086/718371
DO - 10.1086/718371
M3 - Article
AN - SCOPUS:85125033183
SN - 0022-3808
VL - 130
SP - 956
EP - 990
JO - Journal of Political Economy
JF - Journal of Political Economy
IS - 4
ER -