The Problem of Identification in the Modeling World

All right, so I'm going to start off with an intuitive example and then move into something that's a little bit more algebraic. Allright, so I want everybody to imagine that there's one dot on a piece of paper, just one dot and now your task is to fit a line through that dot. And I'm pretty sure that everyone out there can do that perfectly. The challenge is that none of us will come up with the same solution. This is a problem of what we call under identification. There are multiple solutions to this problem and they all fit perfectly no matter what the data are.