American Economic Review: Vol. 101 No. 2 (April 2011)


Quick Tools:

Print Article Summary
Export Citation
Sign up for Email Alerts Follow us on Twitter


AER - All Issues

AER Forthcoming Articles


Article Citation

Olszewski, Wojciech, and Alvaro Sandroni. 2011. "Falsifiability." American Economic Review, 101(2): 788-818.

DOI: 10.1257/aer.101.2.788


We examine Popper's falsifiability within an economic model in which a tester hires a potential expert to produce a theory. Payments are contingent on the performance of the theory vis-à-vis data. We show that if experts are strategic, falsifiability has no power to distinguish scientific theories from worthless theories. The failure of falsification in screening informed and uninformed experts motivates questions on the broader concepts of refutation and verification. We demonstrate an asymmetry between the two concepts. Like falsification, verification contracts have no power to distinguish between informed and uninformed experts, but some refutation contracts are capable of screening experts. (JEL B41)

Article Full-Text Access

Full-text Article


Olszewski, Wojciech (Northwestern U)
Sandroni, Alvaro (Northwestern U and U PA)

JEL Classifications

B41: Economic Methodology

American Economic Review

Quick Tools:

Sign up for Email Alerts

Follow us on Twitter

Subscription Information
(Institutional Administrator Access)


AER - All Issues

AER - Forthcoming Articles

Virtual Field Journals

AEA Member Login:

AEAweb | AEA Journals | Contact Us