Descartes's dream argument points out that, while dreaming, perceived experiences (for example, falling) do not necessarily contain sufficient information to deduce the true situation (being in bed). Since one cannot always distinguish dreams from reality, one cannot rule out the theory that one is presently dreaming rather than having veridical experiences; thus the theory that one is having a veridical experience is underdetermined.
Descartes's demon argument is a variant of the dream argument that posits that all of one's experiences and thoughts might be manipulated by a very powerful being (an "evil demon") that always deceives. Once again, so long as the perceived reality appears internally consistent to the limits of one's limited ability to tell, the situation is indistinguishable from reality, one cannot logically determine between correct belief from being misled; this is another version of underdetermination.
Underdetermination claimed propriety in the twentieth century with the famous work of Thomas S. Kuhn, a theoretical physicist turned philosopher. His famous work, The Structure of Scientific Revolutions offered an alternative to linear models of scientific progress. Besides presenting a general epistemological problem, underdetermination has been used to argue against theories in the philosophy of science, and especially against scientific realism.
Another distinction is between deductive and inductive underdetermination. For two theories to be deductively underdetermined means that the available evidence does not completely contradict either theory. The case of inductively underdetermined theories is more problematic; not only are the theories compatible with the available evidence, but even attempts to determine which theory is better fail.
The possible combinations of these two distinctions yield four types of underdetermination, though by definition a case of weak inductive underdetermination admits the possibility of its own resolution into mere deductive underdetermination through the acquisition of future evidence, otherwise it would fall under strong underdetermination. In turn, it could be argued that it is impossible for a theory to be truly strongly, inductively underdetermined: it would have to admit absolutely no possibility of valid evidence in the favor of other theories or against itself, which would necessitate it not making any novel predictions, which in turn is a valid inductive argument against it (see Occam's razor).
Claims of weak underdetermination tend to center on what evidence happens to be available for some specific set of theories, while strong underdetermination often involves more general epistemological claims about what kind of evidence is possible or viable at all, either for a particular theory or for theories in general. It is widely accepted, but not universally, that all theories are weakly underdetermined; and that all theories are strongly underdetermined for most practical purposes.
More serious cases of underdetermination are illustrated where a theory admits several possibilities between which the evidence for the theory says nothing. Isaac Newton's mechanics provides such an example. According to Newton, there is an absolute space in which events are located but all we can ever detect are differences between velocities. Hence, it is equally consistent with Newton's theory to say that the solar system is at rest as to say that it moves at a velocity of 37 m/s in the direction from the center of the earth to the north pole. Newton himself says these two possibilities are indistinguishable.
Because arguments involving underdetermination involve both a claim about what the evidence is and that such evidence underdetermines a theory, it is often useful to separate these two claims within the underdetermination argument as follows:
The first premise makes the claim that a theory is underdetermined. The second says that rational decision (i.e. using available evidence) depends upon evidence that underdetermines the theory.
Some of the most powerful skeptical arguments appeal to the fact that all the evidence we could ever gather would still fail to determine which theory was true. It would remain compatible with 'skeptical hypotheses' like the maintenance of a complex illusion by Descartes' evil demon or (in a modern updating) the machines who run the Matrix. The skeptic argues that this undermines any claims to knowledge, or even (by internalist definitions), justification.
Philosophers have found this argument very powerful. Hume felt it was unanswerable, but observed that it was in practice impossible to accept its conclusions. Influenced by this, Kant held that while the nature of the 'noumenal' world was indeed unknowable, we could aspire to knowledge of the 'phenomenal' world. A similar response has been advocated by modern anti-realists.
It should be noted that Underdetermination is also a type of Middle ground fallacy: it presupposes, because there is conflict between different views that claim to be correct, that none of them actually are correct.
Particular responses to this argument attack both the first and the second premise (1 and 2). It is argued against the first premise that the underdetermination must be strong and/or inductive. It is argued against that second premise that there is evidence for a theory's truth besides observations; for example, it is argued that simplicity, explanatory power or some other feature of a theory is evidence for it over its rivals.
A more general response from the scientific realist is to argue that underdetermination is no special problem for science, because, as indicated earlier in this article, all knowledge that is indirectly supported by evidence suffers from it - for example, conjectures concerning unobserved observables. It is therefore, ironically, too powerful an argument to have any significance in the philosophy of science, since it does not cast doubt uniquely on conjectured unobservables.