If you want to learn a methodology, there may be an email list you should be on. The two big network analysis packages in R Statnet and igraph each have one (sign up: Statnet, igraph, Mixed Models). If you join them, you can ask questions when you get stuck. But you may end up learning even more from other people’s questions. Jorge M Rocha stimulated Carter Butts to write a mini-essay on exponential random graph models which I received permission to repost. Dave Hunter also adds some thoughts at the bottom.
Brad Delong reposts an essay by Paul Krugman, which I believe was written before the crisis. In this short piece, Krugman attempts to summarize useful macroeconomic models and laments that they have fallen out of fashion.
If you are interested primarily in modeling outside of economics, this Krugman is more useful, but both are definitely worthwhile.
Economist Rajiv Sethi has a great blog. In this post, Sethi, and Thoma, whom he quotes, seem to acknowledge that the financial crisis should lead them to consider new ideas for economic models. Later on in the post, Sethi points out that behavioral economics has mined psychology for insights, but that economists would do well to look beyond the level of the individual:
If one is to look beyond economics for metaphors and models, why stop at psychology? For financial market behavior, a more appropriate discipline might be evolutionary ecology. This is not a new idea. Consider, for instance, this recent article in Nature. Or take a look at the chapter on “The Ecology of Markets” in Victor Niederhoffer’s extraordinary memoir. Or study Hyman Minsky’s financial instability hypothesis (discussed at some length in an earlier post), which depends explicitly on the assumption that aggressive financial practices are rapidly replicated during periods of stable growth, eventually becoming so widespread that systemic stability is put at risk. To my mind this reflects an ecological rather than psychological understanding of financial market behavior.
Reading people like Sethi, I’m confident economics will come around. Sociologists have never overemphasized rational actors, but we too can learn from approaches in other disciplines like ecology.
If P=NP, then the world would be a profoundly different place than we usually assume it to be. There would be no special value in “creative leaps,” no fundamental gap between solving a problem and recognizing the solution once it’s found. Everyone who could appreciate a symphony would be Mozart; everyone who could follow a step-by-step argument would be Gauss; everyone who could recognize a good investment strategy would be Warren Buffett. It’s possible to put the point in Darwinian terms: if this is the sort of universe we inhabited, why wouldn’t we already have evolved to take advantage of it? – Scott Aaronson (reason #9)
When you have some free time, watch this amazing lecture by Avi Wigderson about one of the great open problems in all of mathematics.
Peter Klein agrees with Paul Krugman that economists have mistaken beauty for truth, but disagrees that it has anything to do with the financial crisis so he won’t be signing the Hodgson petition.
Also at the Organizations and Markets blog, Nicolai Foss discusses a special journal issue entitled “Economic Models as Credible Worlds or as Isolating Tools?”
Speaking of models and truth and beauty, I found Murray Gell-Mann’s TED Talk fascinating. He argues that in physics, a beautiful theory is more likely to be true. This makes me a little nervous. I would be especially worried about using this heuristic in the social sciences because the objects we are studying are complex, and have so much meaning to us that our aesthetic sense is more likely to attach to theories for reasons other than truth. Truth may be beautiful, but so are our cognitive biases and ideologies.
I’m finally responding to Eli Thorkelson, who asked for my comments on an article by feminist economist Julie Nelson. The article is a critique of rational choice theory (RCT) and I think it has some omissions and misleading claims.
I regularly come across particular instances of rational choice theorizing that I dislike, but non-economists, including sociologists, often dismiss rational choice theory without understanding it, so when the topic comes up among non-economists, I almost inevitably find myself defending it. My claim is that rational choice theory, broadly construed, is an important, though certainly not the only, useful framework for understanding human behavior. This should be considered an utterly boring claim. What is interesting is how any social scientist could deny it… Read the rest of this entry »