theory-model

name	theory-model
description	Develop formal theoretical models in economics or finance by dispatching the econ-finance-theorist agent. Derives formal frameworks, proofs, equilibrium conditions, and pricing theories. Use when asked to "build a model", "formalize the intuition", "derive equilibrium", or "write the theory section".
disable-model-invocation	true
argument-hint	[research question or intuition to formalize]
allowed-tools	["Read","Grep","Glob","Write","Edit","Task","WebSearch"]

Theory Model

Develop a formal theoretical model by dispatching the econ-finance-theorist agent.

Input: $ARGUMENTS — the research question, economic intuition, or modeling objective to formalize.

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Workflow

Step 1: Gather Context

Before launching the agent:

1. Read paper/main.tex if it exists — understand what the paper's empirical strategy implies about the theory
2. Read .claude/rules/domain-profile.md — field conventions, notation standards, seminal references
3. Read any existing strategy memos in quality_reports/ — the theory should motivate the empirics
4. Check quality_reports/literature/ for theoretical papers already identified

Step 2: Launch econ-finance-theorist Agent

Delegate to the econ-finance-theorist agent via Task tool:

Prompt: Develop a formal theoretical model for [research question / intuition].

Context:
- Field: [from domain-profile.md]
- Empirical strategy: [from strategy memo if available]
- Notation conventions: [from domain-profile.md]
- Seminal theoretical references: [from frontier_map.md if available]

Deliverables:
1. Model setup — environment, agents, timing
2. Equilibrium definition and existence
3. Key propositions (with proofs or proof sketches)
4. Comparative statics linking theory to empirical predictions
5. LaTeX-ready formal write-up

Save to: quality_reports/theory_model_[date].md
Also save LaTeX section to: paper/sections/theory.tex (if paper exists)

Step 3: Theory-Empirics Alignment Check

After the econ-finance-theorist returns, verify:

• Model generates at least one testable prediction that matches the paper's main estimand
• Notation in the model is consistent with domain-profile.md conventions
• Key assumptions are stated clearly (not buried in proofs)
• Comparative statics have the correct sign relative to reduced-form findings

If misaligned with the empirical strategy, flag for the user — the model may need adjustment or the empirical strategy memo may need updating.

Step 4: Optional — econometrics-critic Review

For papers where the theory is central to identification (e.g., structural models, moment conditions from theory), optionally dispatch the econometrics-critic to verify:

• The model's moment conditions are correctly derived
• The theoretical predictions are testable given the data
• The assumptions are defensible

Step 5: Present Results

## Theory Model: [Research Question]
**Date:** YYYY-MM-DD
**Agent:** econ-finance-theorist

### Model Summary
[2-3 sentences: setup, key mechanism, main prediction]

### Key Propositions
1. [Proposition + intuition]

### Empirical Predictions
- [Prediction 1 → mapped to which regression/test]

### LaTeX Output
- Full model: quality_reports/theory_model_[date].md
- Paper section: paper/sections/theory.tex

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Output Location

• Full model: quality_reports/theory_model_[date].md
• LaTeX-ready section: paper/sections/theory.tex (creates or updates)
• Append entry to quality_reports/research_journal.md

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Principles

• Theory motivates empirics. The model should generate predictions the empirical strategy tests.
• Assumptions first. State all assumptions before deriving results — referees will scrutinize them.
• Notation consistency. Use the same symbols in the theory as in the empirical sections.
• No floating propositions. Every proposition must connect back to a testable implication.
• Proofs in appendix. Main text has propositions and intuition; full proofs go to appendix.