Financial economists simultaneously defend models while accepting they are surely false descriptions of reality.

Evidence

However, all of the finance theorists centrally discussed in this book would both strongly defend the virtues of their models and agree with Fama’s assertion, quoted in chapter 4, that any model is “surely false” in the sense of not being an exact description of market realities. Finance theory is an epistemic culture that makes knowledge using models, but there is a deep ambivalence in the field’s attitude to the extent to which its models can be taken as realistic. — Donald MacKenzie, An Engine, Not a Camera, 1121

Categorization

• XREF: Relates to the performativity thesis throughout this book: model-builders’ own ambivalence about realism is a precondition for models being taken as performative infrastructure rather than descriptive truth. — connects to: Economists defended failed prediction by asserting contradictory claims at once — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 697; Unrealistic assumptions do not count as legitimate criticisms in financial economics — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 63; Financial models survive despite known false predictions when they remain useful. — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 60 (+2 more)
• DEFINE: Defines the epistemic stance of the field: models as useful fictions, not depictions — the ontological core of the performativity argument.

Broader Connections

• Economists defended failed prediction by asserting contradictory claims at once #expands (0.85) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 697
• Economic theories function as analytic engines rather than exact copies of reality. #corroborates (0.80)
• Unrealistic assumptions do not count as legitimate criticisms in financial economics #qualifies (0.78) — Donald MacKenzie, An Engine, Not a Camera, 63
• Financial models survive despite known false predictions when they remain useful. #qualifies (0.75) — Donald MacKenzie, An Engine, Not a Camera, 60
• Fascist-era economists saw their models as Platonic truths to impose on reality #contradicts (0.72) — Clara E. Mattei, The Capital Order, 1116