Advertisement

Theory and Models

  • Darren Grant
Chapter
Part of the Springer Texts in Business and Economics book series (STBE)

Abstract

This chapter distinguishes a theory from a model and lays out the threefold objectives of economic models. It demonstrates how to negotiate the tradeoffs involved in meeting these objectives, and specifies three instruments that can be used for this purpose. These ideas come to life in applications to attorney compensation, insurance pricing and valuation, the behavior of government bureaucracies, the size of cities, and more.

References

  1. Acemoglu D, Laibson D, List J (2015) Economics. Pearson, LondonGoogle Scholar
  2. Bade R, Parkin M (2017) Foundations of economics. Pearson, LondonGoogle Scholar
  3. Baik KH, Kim I (2007) Strategic decisions on lawyers’ compensation in civil disputes. Econ Inq 45(4):854–863CrossRefGoogle Scholar
  4. Barash D (1994) Beloved enemies: our need for opponents. Prometheus Books, Amherst, NYGoogle Scholar
  5. Birks S (2015) Rethinking economics: from analogies to the real world. Springer, New YorkGoogle Scholar
  6. Boland LA (2014) The methodology of economic model building: methodology after Samuelson. Routledge, AbingdonCrossRefGoogle Scholar
  7. Cabral M, Cullen MR (2016) Estimating the value of public insurance using complementary private insurance. (No. w22583). National Bureau of Economic ResearchGoogle Scholar
  8. Choi S, Hardigree D, Thistle PD (2002) The property/liability insurance cycle: a comparison of alternative models. South Econ J 68(3):530–548CrossRefGoogle Scholar
  9. Depken C II, Grant D (2011) Multiproduct pricing in major league baseball: a principal components analysis. Econ Inq 49(2):474–488CrossRefGoogle Scholar
  10. Duranton G, Puga D (2014) The growth of cities. In: Aghion P, Durlauf S (eds) Handbook of economic growth, vol 2. Elsevier, Amsterdam, pp 781–853Google Scholar
  11. Gabaix X (1999) Zipf’s law for cities: an explanation. Q J Econ 114(3):739–767CrossRefGoogle Scholar
  12. Gilboa I (2015) A world of models: review of Mary S. Morgan, the world in the model: how economists work and think. J Econ Methodol 22(2):235–240CrossRefGoogle Scholar
  13. Gilboa I, Postlewaite A, Samuelson L, Schmeidler D (2014) Economic models as analogies. Econ J 124(578):F513–F533CrossRefGoogle Scholar
  14. Grant D (2003) The effect of implicit contracts on the movement of wages over the business cycle: evidence from the National Longitudinal Surveys. Ind Labor Relat Rev 56(3):393–408CrossRefGoogle Scholar
  15. Grant D (2016) The essential economics of threshold-based incentives: theory, estimation, and evidence from the Western states 100. J Econ Behav Organ 130:180–197CrossRefGoogle Scholar
  16. Larson B (2015) Occupational licensing and quality: distributional and heterogeneous effects in the teaching profession. Stanford University, Stanford, CA. https://web.stanford.edu/~bjlarsen/Larsen%20(2015)%20Occupational%20licensing%20and%20quality.pdf Google Scholar
  17. Lucas RE Jr (1987) Models of business cycles. Basil Blackwell, OxfordGoogle Scholar
  18. Lucas RE Jr (2003) Macroeconomic priorities. Am Econ Rev 93(1):1–14CrossRefGoogle Scholar
  19. Manzi J (2012) Uncontrolled: the surprising payoff of trial-and-error for business, politics, and society. Basic Books, New YorkGoogle Scholar
  20. Mincer J (1974) Schooling, experience, and earnings. University of Michigan Press, Ann Arbor, MIGoogle Scholar
  21. Molloy R, Smith CL, Wozniak AK (2014) Declining migration within the US: the role of the labor market. National Bureau of Economic Research working paperGoogle Scholar
  22. Morgan MS (2012) The world in the model: how economists work and think. Cambridge University Press, CambridgeCrossRefGoogle Scholar
  23. Smith VL (1982) Microeconomic systems as experimental science. Am Econ Rev 72(5):923–955Google Scholar
  24. Varian H (1989) What use is economic theory? Manuscript. University of California, BerkeleyGoogle Scholar
  25. Wilson JQ (1989) Bureaucracy: what government agencies do and why they do it. Basic Books, New YorkGoogle Scholar

Copyright information

© Springer Nature Switzerland AG 2018

Authors and Affiliations

  • Darren Grant
    • 1
  1. 1.Sam Houston State UniversityHuntsvilleUSA

Personalised recommendations