Symbolic analysis of economical models with mathematica

Abstract

Functional equations is a very powerful technique to obtain consistent models in Economics. Unfortunately, there is only a few computer tools for solving functional equations. In this paper a Mathematica package, FSolve, is applied to the symbolic analysis of some economical models for price and advertising policies. The procedure is as follows: firstly, we make some assumptions about the functional structure of the functions describing the models. Such assumptions are given in terms of functional equations that account for some economical properties. Then, the package is applied to compute the solutions of these equations and check for inconsistencies. The interesting cases of the monopoly and duopoly models are discussed. © Springer-Verlag Berlin Heidelberg 2006.