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Bounding Comparative Statics under Diagonal Dominance

Author

Listed:
  • Jordan Norris
  • Charles Johnson
  • Ilya Spitkovsky

    (Division of Social Science)

Abstract

A core purpose of economic modeling is to conduct comparative static analyzes. Often one is interested in its qualitative features, such as if the e ect of a shock is positive or above one. Yet, except in highly-stylized models, the theoretically implied relationships are intractable, and empirically demanding, requiring complete identication of the model. We derive new bounds on comparative statics that are more tractable and feasible under partial identi cation. We require only that the Jacobian is diagonally dominant | intuitively, there is limited feedback in the model. We demonstrate application in two canonical models: a network game and a model of oligopoly competition. JEL Codes: C3, D85

Suggested Citation

  • Jordan Norris & Charles Johnson & Ilya Spitkovsky, 2023. "Bounding Comparative Statics under Diagonal Dominance," Working Papers 20230082, New York University Abu Dhabi, Department of Social Science, revised Jan 2023.
    • Handle: RePEc:nad:wpaper:20230082
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    File URL: https://nyuad.nyu.edu/content/dam/nyuad/academics/divisions/social-science/working-papers/2023/0082.pdf
    File Function: First version, 2020
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    References listed on IDEAS

    as
    1. Yann Bramoullé & Andrea Galeotti & Brian Rogers, 2016. "The Oxford Handbook of the Economics of Networks," Post-Print hal-01447842, HAL.
    2. Yann Bramoullé & Andrea Galeotti & Brian Rogers, 2016. "The Oxford Handbook of the Economics of Networks," Post-Print hal-03572533, HAL.
    3. Dixit, Avinash K, 1986. "Comparative Statics for Oligopoly," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 27(1), pages 107-122, February.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Finn Christensen, 2023. "Comparative Statics for Difference-in-Differences," Working Papers 2023-08, Towson University, Department of Economics, revised Nov 2023.

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    More about this item

    JEL classification:

    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation

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