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Quote by David M. Kreps

“It is universally appreciated, I think, that theorists are able to tweak their assumptions in order to reach any conclusion they wish. The believability of the conclusion depends not only on the fact that it was reached but on how hard the theorist had to tweak the model to get there.”

Quote by David M. Kreps

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David M. Kreps
David M. Kreps

David M. Kreps is an American economist renowned for his contributions to game theory and experimental economics. He has taught at Stanford University and the University of California, Berkeley, and served as the president of the Federal Reserve Bank of St. Louis from 1997 to 2001. Kreps' research focuses on market mechanisms, information economics, and decision-making under asymmetric information. more

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“Page after page of professional economic journals are filled with mathematical formulas leading the reader from sets of more or less plausible but entirely arbitrary assumptions to precisely stated but irrelevant theoretical conclusions.”

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Book:Essays in Economics: Theories, Theorizing, Facts, and Policies
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“The danger of tautological propositions is considerable in discussions of the concept of normal profits. Because supernormal profits seem to invite newcomers to an industry and sub-normal profits seem to drive away those who are in an industry, some writers are inclined to define normal profits as the earnings of the fixed resources in an industry which neither grows nor declines in size or number of firms. It should be clear that such a definition is useless: it muddles together attractiveness and actual afflux, desirbility of entry and ease of entry, zero profits and monopoly rents.”

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“I admit that these terms and the diagrams connected with them repel some readers, and fill others with the vain imagination that they have mastered difficult economics problems, when really they have done little more than learn the language in which parts of those problems can be expressed, and the machinery by which they can be handled. When the actual conditions of particular problems have not been studied, such knowledge is little better than a derrick for sinking oil-wells erected where there are no oil-bearing strata.”

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“The solution was eventually found by Johannes Gutenberg, who made the breakthrough that finally established printing as the communication technology of the future. Similar ideas may have been under development around the same time in Prague and Haarlem. But in business, the key question is not about who else is in the race, it's about who gets there first. Johannes Gutenberg was the first to make the new technology work, ensuring his place in any history of the human race.”

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Author:Alister E. McGrath
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