Thought experiments in alternate universes

Alternate universes ... [reference]

A couple of days ago, I did an update to this post on Dani Rodrik's new book and his view that various economic models are actually just experiments on systems that are theoretically isolated via assumptions -- a view that I think is actually pretty silly.

I realized that there's a better analogy for what Rodrik is trying to say.

In a sense, Rodrik is saying economic models are thought experiments in alternate universes. Those alternate universes are created from the different economic assumptions. The picture above has a collection of universes with positive, negative and zero cosmological constant; however, the assumptions in economic models of perfect competition or satiation of preferences (or transitive preferences themselves) create e.g. different Arrow-Debreu universes with different properties.

What it comes down to is that if you want to use your alternate universe model to address policy in our universe, you're going to have to:

a) Have fundamental theory that tells you when the assumptions are valid
b) Empirically determine the assumptions are valid
c) Prove that your model is independent of your assumptions
d) Some combination of the above three