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Testable Comparative Statics with Spillovers

Author

Listed:
  • Finn Christensen

    (Department of Economics, Towson University)

Abstract

Comparative statics generates qualitative predictions, but these predictions are rarely expressed as empirically identifiable average effects. This paper develops testable comparative statics for environments with spillovers. Standard difference-in-differences and difference-in-means estimands identify MATTS, the Marginal Average Treatment Effect on the Treated with Spillovers. I characterize when equilibrium theory signs MATTS: assignment-robust nonnegativity holds exactly when the negated Jacobian inverse is a B_{0}-matrix by columns. The results globalize local comparative statics to finite treatments and show how reduced-form evidence can evaluate model-implied sign predictions in interacting economic systems.

Suggested Citation

  • Finn Christensen, 2023. "Testable Comparative Statics with Spillovers," Working Papers 2023-08, Towson University, Department of Economics, revised Jun 2026.
    • Handle: RePEc:tow:wpaper:2023-08
    as

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    File URL: http://webapps.towson.edu/cbe/economics/workingpapers/2023-08.pdf
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    References listed on IDEAS

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    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C18 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Methodolical Issues: General

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