Behavioural Procedural Models – a multipurpose mechanistic account

Abstract

In this paper we outline an epistemological defence of what wecall Behavioural Procedural Models (BPMs), which represent the processes of individual decisions that lead to relevant economic patterns as psychologically (rather than rationally) driven. Their general structure, and the way in which they may be incorporated to a multipurpose view of models, where the representational and interventionist goals are combined, is shown. It is argued that BPMs may provide “mechanistic-based explanations” in the sense defended by Hedström and Ylikoski (2010), which involve invariant regularities in Woodward’s sense. Such mechanisms provide a causal sort of explanation of anomalous economic patterns, which allow for extra marketintervention and manipulability in order to correct and improve some key individual decisions. This capability sets the basis for the so called libertarian paternalism (Sunstein and Thaler 2003).

Keywords

• Economic explanation
• Interventionist economic policy
• Epistemology