Abstract

Ever since game theory has become a dominant mode of investigation in economics, critics have pointed out that it is a formally strong but empirically weak, if not empty, practice.1 We argue against the empirical irrelevance of game theory by investigating the architecture of game theoretic explanations more closely. In particular, we study the role of game models, and find that they assume the role of mediators as autonomous relaters of theory and phenomena. We further argue that stories play an essential part in the mediating function of models: stories that recount the phenomena in such a way that it becomes compatible with the theoretical framework. Contrary to some claims, these stories are subject to evaluation by various criteria, some of which are criteria derived from intuitive judgment. These criteria provide the means to judge whether a model represents a phenomenon or not. Through good stories, phenomena can therefore be related to highly abstract models. Applied game theory, we conclude, has therefore empirical content by representing phenomena in an abstract fashion. (JEL B4,C7. Keywords: Economic methodology, Game theory.).