Presentation

Evaluation of a regulatory Markov model on market impacts

On behalf of a company, we have presented a government agency’s complex Markov model in a clear and accessible manner and assessed how robust the predicted market impacts actually are.

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Background

A company was faced with a proposed regulation that would have significant implications for its future sales prospects. The regulatory authority had already quantified the expected long-term effects using a complex Markov model – but it was unclear to the company how reliable these figures were.

Our Approach

  • 1

    A clear explanation of the logic behind the regulatory Markov model.

  • 2

    Identification of the most influential assumptions and assessment of their impact through sensitivity analyses.

  • 3

    A clear overview of where the results are robust and where they are not.

Result

The result was a clearly structured presentation that enabled management to quickly grasp a model that would otherwise have been difficult to understand. The company was able to better assess the validity of the regulatory analysis, scrutinise it in a targeted manner and develop its own well-founded position.