21.1 Building An Analytical Model

Notes by professor Sajeesh Sajeesh

Step 1: Get “good” idea (either from literature or industry)

Step 2: Assess the feasibility of the idea

  • Is it interesting?

  • Can you tell a story?

  • Who is the target audience?

  • Opportunity cost

Step 3: Don’t look at the literature too soon

  • Even when you have an identical model as in the literature, it’s ok (it allows you to think)

Step 4: BUild the model

  • Simplest model first: 1 period, 2 product , linear utility function for consumers

  • Write down the model formulation

  • Everything should be as simple as possible .. but no simpler

Step 5: Generalizing the model

  • Adding complexity

Step 6: Searching the literature

  • If you find a paper, you can ask yourself why you didn’t do what the author has done.

Step 7: Give a talk /seminar

Step 8: Write the paper