Theory and Models

Part of the Springer Texts in Business and Economics book series (STBE)


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.


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© Springer Nature Switzerland AG 2018

Authors and Affiliations

  1. 1.Sam Houston State UniversityHuntsvilleUSA

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