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Supermodularity and complementarity in economics: an elementary survey

  • AMIR, Rabah

The literature on supermodular optimization and games is surveyed from the perspective of potential users in economics. This methodology provides a new approach for comparative statics based only on critical assumptions, and allows a general analysis of games with strategic complementarities. The results are presented in a simplified yet rigourous manner, without reference to lattice theory, for the special case of onedimensional parameter and actions sets, with the emphasis being onwide accessibility. Detailed applications are presented for well-known models of consumer behavior, monopoly pass-through, Bertrand and Cournot competition, strategic R&D, search and matching. Wherever appropriate, useful tricks for applications and comparative comments are inserted.

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Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers RP with number 1823.

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Handle: RePEc:cor:louvrp:1823
Note: In : Southern Economic Journal, 71(3), 636-660, 2005
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