Optimal transportation and the falsifiability of incompletely specified economic models

Ivar Ekeland, Alfred Galichon, Marc Henry

Research output: Contribution to journalArticlepeer-review

16 Scopus citations

Abstract

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.

Original languageEnglish (US)
Pages (from-to)355-374
Number of pages20
JournalEconomic Theory
Volume42
Issue number2
DOIs
StatePublished - Nov 2009

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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