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Optimal transportation and the falsifiability of incompletely specified economic models

Ekeland, Ivar; Galichon, Alfred; Henry, Marc (2010), Optimal transportation and the falsifiability of incompletely specified economic models, Economic Theory, 42, 2, p. 355 - 374. 10.1007/s00199-008-0432-y

Type
Article accepté pour publication ou publié
Date
2010
Journal name
Economic Theory
Volume
42
Number
2
Publisher
Springer
Pages
355 - 374
Publication identifier
Metadata
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Author(s)
Ekeland, Ivar
CEntre de REcherches en MAthématiques de la DEcision [CEREMADE]
Galichon, Alfred
Henry, Marc
Centre interuniversitaire de recherche en analyse des organisations [CIRANO]
Centre interuniversitaire de recherche en économie quantitative [CIREQ]
Abstract (EN)
A general framework is given to analyze the falsifiability of economic models based on a sample of their observable components. It is shown that, when the restrictions implied by the economic theory are insufficient to identify the unknown quantities of the structure, the duality of optimal transportation with zero–one cost function delivers interpretable and operational formulations of the hypothesis of specification correctness from which tests can be constructed to falsify the model.
Subjects / Keywords
incompletely specified models; optimal transportation
JEL
C10 - General
C12 - Hypothesis Testing: General
C13 - Estimation: General
C14 - Semiparametric and Nonparametric Methods: General
C52 - Model Evaluation, Validation, and Selection
C61 - Optimization Techniques; Programming Models; Dynamic Analysis