Dilemmas of an Economic Theorist by Ariel Rubinstein

models are successfully constructed and meaning emerges from the manipulation of symbols. It is moving when I observe that same excitement in students’ faces. Thus, my greatest dilemma is between my attraction to economic theory, on the one hand, and my doubts about its relevance, on the other. In this lecture I will try to decompose this basic dilemma into four parts: The dilemma of absurd conclusions: Should we abandon a model if it produces absurd conclusions or should we regard it as a very limited set of assumptions that will inevitably fail in some contexts? The dilemma of responding to reality: Should our models be judged according to experimental results? The dilemma of modelless regularities: Should models provide the hypothesis for testing or are they simply exercises in logic that have no use in identifying