Simple Models are Better Than Complicated Models

Other things being equal, we want a model to be simple and easy to use. The nice feature of the "cow on the mountain" model is it is so easy to think about and modify. The ugly feature of the "epi-circle" theory of planetary motion is it is so difficult to calculate where a planet should be. If we have two theories predict the same thing, but one is much more complicated than the other, then we want to pick the simpler one. Remember, a model is made for a purpose; we're ultimately trying to think systematically about social behavior. It's hard enough to do, so if we can do it with a simple model, then that's the road we want to take. Besides, if it isn't simple, how can we impress our boss at the annual Christmas party?

Technorati : economic models