Optimal transportation and the falsifiability of incompletely specified economic models
Econometrics
2021-02-25 v2
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.
Keywords
Cite
@article{arxiv.2102.04162,
title = {Optimal transportation and the falsifiability of incompletely specified economic models},
author = {Ivar Ekeland and Alfred Galichon and Marc Henry},
journal= {arXiv preprint arXiv:2102.04162},
year = {2021}
}
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19 pages