How Flexible Is that Functional Form? Quantifying the Restrictiveness of Theories

• 成果类型: Article
• 署名作者: Fudenberg, Drew; Gao, Wayne; Liang, Annie
• 署名单位: Massachusetts Institute of Technology (MIT); University of Pennsylvania; Northwestern University
• 刊物名称: REVIEW OF ECONOMICS AND STATISTICS
• ISSN/ISSBN: 0034-6535
• DOI: 10.1162/rest_a_01401
• 发表日期: 2026
• 关键词: PROSPECT-THEORY; players models; probability; RISK; preference; Heterogeneity; lotteries; CHOICE; tests

摘要

We propose a restrictiveness measure for economic models based on how well they fit predefined synthetic data. This measure, together with a measure for how well the model fits real data, outlines a Pareto frontier, where models that rule out more regularities, yet capture the regularities that are present in real data, are preferred. To illustrate our approach, we evaluate the restrictiveness of models in two laboratory settings-certainty equivalents and initial play-and one field setting- takeup of microfinance in Indian villages. The restrictiveness measure reveals insights about each, including that some economic models with only a few parameters are very flexible.