Abstract
This chapter addresses the questions: ‘What is an economic model?’, ‘How are economic models built?’ and ‘Why are they so useful in international business studies?’. It shows that economic models are particularly useful for analysing complex problems, such as competition and cooperation, where several firms, rather than just a single firm, are involved. The chapter describes some important model-building techniques and explains how they are applied.
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Bibliography
The basic results presented in the chapter can be found in any intermediate level textbook on microeconomics and consumer behaviour. The mathematics is more elementary than that in some texts, but the discussion is more sophisticated and philosophical than usual
For a discussion of product characteristics and their influence on demand see
Lancaster, K. (1966). A new approach to consumer theory. Journal of Political Economy, 74, 132–157.
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Casson, M. (2016). Introduction to Modelling Techniques. In: The Theory of International Business. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-32297-1_2
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DOI: https://doi.org/10.1007/978-3-319-32297-1_2
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Publisher Name: Palgrave Macmillan, Cham
Print ISBN: 978-3-319-32296-4
Online ISBN: 978-3-319-32297-1
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