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Directional monotone comparative statics

Author

Listed:
  • Anne-Christine Barthel

    (West Texas A & M University)

  • Tarun Sabarwal

    (University of Kansas)

Abstract

Many questions of interest in economics can be stated in terms of monotone comparative statics: If a parameter of a constrained optimization problem increases, when does its solution increase as well. We characterize monotone comparative statics in different directions in finite-dimensional Euclidean space by extending the monotonicity theorem of Milgrom and Shannon (Econometrica 62(1):157–180, 1994) to constraint sets ordered in Quah (Econometrica 75(2):401–431, 2007)’s set order. Our characterizations are ordinal and retain the same flavor as their counterparts in the standard theory, showing new connections to the standard theory and presenting new results. The results are highlighted with several applications (in consumer theory, producer theory, and game theory) which were previously outside the scope of the standard theory of monotone comparative statics.

Suggested Citation

  • Anne-Christine Barthel & Tarun Sabarwal, 2018. "Directional monotone comparative statics," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 66(3), pages 557-591, October.
  • Handle: RePEc:spr:joecth:v:66:y:2018:i:3:d:10.1007_s00199-017-1079-3
    DOI: 10.1007/s00199-017-1079-3
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    Cited by:

    1. Alexandrov, Alexei & Bedre-Defolie, Özlem, 2017. "LeChatelier–Samuelson principle in games and pass-through of shocks," Journal of Economic Theory, Elsevier, vol. 168(C), pages 44-54.
    2. Tarun Sabarwal, 2023. "Universal Theory of Equilibrium in Models with Complementarities," WORKING PAPERS SERIES IN THEORETICAL AND APPLIED ECONOMICS 202312, University of Kansas, Department of Economics, revised Nov 2023.
    3. Bar Light, 2021. "Stochastic Comparative Statics in Markov Decision Processes," Mathematics of Operations Research, INFORMS, vol. 46(2), pages 797-810, May.
    4. Rabah Amir & Igor Evstigneev & Adriana Gama, 2021. "Oligopoly with network effects: firm-specific versus single network," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 71(3), pages 1203-1230, April.
    5. Uttiya Paul & Tarun Sabarwal, 2023. "Directional monotone comparative statics in function spaces," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 11(1), pages 153-169, April.
    6. Rabah Amir, 2018. "Special issue: supermodularity and monotone methods in economics," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 66(3), pages 547-556, October.
    7. Rabah Amir, 2019. "Supermodularity and Complementarity in Economic Theory," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 67(3), pages 487-496, April.
    8. Koch, Caleb M., 2019. "Index-wise comparative statics," Mathematical Social Sciences, Elsevier, vol. 102(C), pages 35-41.
    9. Bar Light, 2019. "Stochastic Comparative Statics in Markov Decision Processes," Papers 1904.05481, arXiv.org, revised Jan 2020.

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    More about this item

    Keywords

    Monotone comparative statics; i-Directional single crossing property; i-Directional set order; Quasisupermodular function;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • D00 - Microeconomics - - General - - - General

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