Even a model’s creator initially refused its empirically unpalatable conclusions

Evidence

Clearly, this implication of Sharpe’s model was empirically false. Sharpe balked “I thought, well, nobody will believe this. This can’t be right” and he tweaked his mathematics to avoid the unpalatable conclusion. “I wanted ever so much for there to be multiple risky portfolios that were efficient … it does not come naturally” out of the mathematics (Sharpe interview). In the analysis in his published paper, multiple optimal portfolios albeit all perfectly correlated with each other are indeed possible, and Sharpe told his readers that “the theory does not imply that all investors will hold the same combination” of risky assets (Sharpe 1964, p. 435). — Donald MacKenzie, An Engine, Not a Camera, 248

Categorization

• XREF: Connects to the performativity thesis: models are shaped by social acceptability biases before they shape markets — the model builder’s own resistance is part of how theories get made, echoing Latour-style construction of facts. — connects to: Gehlen’s pragmatism concealed a refusal to test his claims empirically — Rolf Wiggershaus, The Frankfurt School: Its History,…, 2488; A model’s own applications can undermine its descriptive accuracy — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 151; Early CAPM believers later turned against it through theoretical work — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 402 (+1 more)
• SEED: Article angle: how scientists and model-builders self-censor their own results to make them socially palatable — belief-correction as a methodological force distinct from empirical testing.

Broader Connections

• A model’s own applications can undermine its descriptive accuracy #exemplifies (0.80) — Donald MacKenzie, An Engine, Not a Camera, 151
• Early CAPM believers later turned against it through theoretical work #exemplifies (0.72) — Donald MacKenzie, An Engine, Not a Camera, 402