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Inverse View
It is not the case that Central generalizations like 'firms maximize profits' function as domain assumptions, which must be approximately true for the theory's scope to be legitimate.
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Reasons For
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Reason for
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1.
Many successful theories use demonstrably false assumptions (spherical cows, frictionless surfaces) yet remain scientifically legitimate.
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2.
Firms pursue multiple goals—survival, market share, social legitimacy—making profit-maximization empirically inaccurate as a domain assumption.
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3.
Predictive accuracy matters more than assumption truth; a theory can work despite false foundations if outputs match reality.
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Reasons Against
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Reason against
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1.
Theories require background assumptions to establish scope; without them, no theory can claim applicability to any domain.
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2.
Profit-maximization approximately holds across competitive markets; deviations are often marginal and don't invalidate core predictions.
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3.
Allowing false domain assumptions would make theories unfalsifiable and scientifically illegitimate.
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