Comparative Statics by Adaptative Dynamics and the Correspondence Principle
AbstractThis paper formalizes the relation between comparative statics and the out-of-equilibrium explanation for how a system evolves after a change in parameters. The paper has two main results. First, an increase in an exogenous parameter sets o learning dynamics that involve larger values of the endogenous variables. Second, equilibrium selections that are not monotone increasing in the exogenous variables must be predicting unstable equilibria. Moreover, under some conditions monotone comparative statics and stability are equivalent.
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Bibliographic InfoPaper provided by Department of Economics - dECON in its series Documentos de Trabajo (working papers) with number 2099.
Length: 37 pages
Date of creation: Dec 1999
Date of revision:
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Other versions of this item:
- Federico Echenique, 2002. "Comparative Statics by Adaptive Dynamics and the Correspondence Principle," Econometrica, Econometric Society, Econometric Society, vol. 70(2), pages 833-844, March.
- Federico Echenique, 2000. "Comparative Statics by Adaptive Dynamics and The Correspondence Principle," Econometric Society World Congress 2000 Contributed Papers 1906, Econometric Society.
- Federico Echenique., 2000. "Comparative Statics by Adaptive Dynamics and The Correspondence Principle," Economics Working Papers, University of California at Berkeley E00-273, University of California at Berkeley.
- Federico Echenique, 2000. "Comparative Statics by Adaptive Dynamics and The Correspondence Principle," GE, Growth, Math methods, EconWPA 9912002, EconWPA.
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
- C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
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