Contextualist model evaluation: models in financial economics and index funds

Melissa Vergara Fernandez*, Conrad Heilmann, Marta Szymanowska

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

2 Citations (Scopus)

Abstract

Philosophers of science typically focus on the epistemic performance of scientific models when evaluating them. Analysing the effects that models may have on the world has typically been the purview of sociologists of science. We argue that the reactive (or “performative”) effects of models should also figure in model evaluations by philosophers of science. We provide a detailed analysis of how models in financial economics created the impetus for the growing importance of the phenomenon of “passive investing” in financial markets. Considering this case motivates the position that we call contextualism about model evaluation, or model contextualism for short. Model contextualism encompasses standard analyses of the epistemic performance of the model, but also includes their reactive aspects. It entails identifying the epistemic and contextual import of the model, the ways in which a model can engender change in the world (which we call the channels of transmission), and the interactions between the epistemic and reactive import of a model.
Original languageEnglish
Article number6
JournalEuropean Journal for Philosophy of Science
Volume13
Issue number1
DOIs
Publication statusPublished - Mar 2023

Bibliographical note

Funding Information:
We thank Caterina Marchionni, Marion Godman, and Julie Zahle for their organisation of the Reactivity Project as well as the participants of the workshop in Helsinki for their helpful comments. The two anonymous referees offered astute comments that significantly improved the paper. Melissa Vergara-Fernández thanks María Jiménez-Buedo for the opportunity to present this work at the philosophy of science seminar at UNED and the audience at the seminar for their questions and comments. The authors gratefully acknowledge financial support from the Erasmus Initiative “Dynamics of Inclusive Prosperity” at Erasmus University Rotterdam.

Funding Information:
We thank Caterina Marchionni, Marion Godman, and Julie Zahle for their organisation of the Reactivity Project as well as the participants of the workshop in Helsinki for their helpful comments. The two anonymous referees offered astute comments that significantly improved the paper. Melissa Vergara-Fernández thanks María Jiménez-Buedo for the opportunity to present this work at the philosophy of science seminar at UNED and the audience at the seminar for their questions and comments. The authors gratefully acknowledge financial support from the Erasmus Initiative “Dynamics of Inclusive Prosperity” at Erasmus University Rotterdam.

Publisher Copyright:
© 2023, The Author(s).

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