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Model variations and sensivity analysis

The four analytical steps may have to be repeated for the main alternatives under consideration.

Step 1 Try to incorporate the main variations of the conclusions (analytical step) into the same model and discuss the outcomes.

Step 2 Highlight the critical assumptions on which the solution depends.

Step 3 Ascertain whether the model is robust with respect to those assump­tions and, if it is not, indicate precisely where the model applies.

Step 4 Give a survey of the most important competing models not used in this analysis and indicate the reasons for your preference. If that preference is only slight, you may have to repeat the analysis in terms of the second-best model.

Step 5 Translate the results of your analysis and the main steps by which it came about into legal terms.

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Source: Backhaus Jürgen G. (ed.). The Elgar Companion to Law And Economics. Second Edition. Edward Elgar,2005. – 777 p.2. 2005
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