INTRODUCTION

Suppose that after years of living in genteel poverty, you have inherited a small fortune. Having little financial expertise yourself, you decide you are in need of a financial advisor who will help you invest your money wisely. You consult with two candidates, each of whom endorses a particular investment strategy. Each candidate's strategy is based on an account of the forces that induce the value of various investments to fluctuate. In fact, the two advisors can offer detailed explanations of why the value of these investments have changed in the way they have over the past five years. There is, however, one difference between the two advisors: one offered his account prior to the beginning of the five-year period, thus successfully predicting the various price changes. The other offered her account after the five-year period, and thus proposed to explain the price changes after they occurred. Now the question is whether you have, based on just this information, any reason to prefer one advisor over the other. One might insist that the two advisors are on equal ground: both offer accounts that are consistent with the same body of data. But it seems obvious – to many – that there is reason to prefer the advisor who made successful predictions over the one who didn't. If you agree, you may be inclined to endorse a particular view about how evidence confirms theory, a view known as ‘predictivism.’