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Comparative Statics, Informativeness, and the Interval Dominance Order

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  • John K.-H. Quah
  • Bruno Strulovici

Abstract

We identify a new way to order functions, called the interval dominance order, that generalizes both the single crossing property and a standard condition used in statistical decision theory. This allows us to provide a unified treatment of the major theorems on monotone comparative statics with and without uncertainty, the comparison of signal informativeness, and a non-Bayesian theorem on the completeness of increasing decision rules. We illustrate the concept and results with various applications, including an application to optimal stopping time problems where the single crossing property is typically violated. Copyright 2009 The Econometric Society.

Suggested Citation

  • John K.-H. Quah & Bruno Strulovici, 2009. "Comparative Statics, Informativeness, and the Interval Dominance Order," Econometrica, Econometric Society, vol. 77(6), pages 1949-1992, November.
  • Handle: RePEc:ecm:emetrp:v:77:y:2009:i:6:p:1949-1992
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    References listed on IDEAS

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    1. Ormiston Michael B. & Schlee Edward E., 1993. "Comparative Statics under Uncertainty for a Class of Economic Agents," Journal of Economic Theory, Elsevier, vol. 61(2), pages 412-422, December.
    2. Milgrom, Paul & Shannon, Chris, 1994. "Monotone Comparative Statics," Econometrica, Econometric Society, vol. 62(1), pages 157-180, January.
    3. Susan Athey & Jonathan Levin, 1998. "The Value of Information In Monotone Decision Problems," Working papers 98-24, Massachusetts Institute of Technology (MIT), Department of Economics.
    4. Milgrom, Paul & Roberts, John, 1990. "Rationalizability, Learning, and Equilibrium in Games with Strategic Complementarities," Econometrica, Econometric Society, vol. 58(6), pages 1255-1277, November.
    5. Susan Athey, 2002. "Monotone Comparative Statics under Uncertainty," The Quarterly Journal of Economics, Oxford University Press, vol. 117(1), pages 187-223.
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    More about this item

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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