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To construct a model one abstracts from the unimportant features of that reality and replaces it by a formal structure, whose properties, explicitly assumed or logically de ducible from the stated assumptions, correspond to the interesting relationships of the reality being studied.
A new approach to explaining the existence of firms and markets, focusing on variability and coordination. This approach, called the variability approach, allows us to: show why both the need for communication and the coordination costs increase when the division of labor increases;
A new approach to explaining the existence of firms and markets, focusing on variability and coordination. This approach, called the variability approach, allows us to: show why both the need for communication and the coordination costs increase when the division of labor increases;
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