Strict Monotonicity in Comparative Statics
This note provides sufficient conditions to draw strict monotone comparative statics conclusions in optimization problems. These results extend the lattice-theoretic results of Milgrom and Shannon (1994) by imposing a stronger differential version of the single crossing property and arguing from first- order conditions. We illustrate the importance of these results through examples involving holdup problems and optimal tax problems.
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- Edlin, Aaron S & Reichelstein, Stefan, 1996.
"Holdups, Standard Breach Remedies, and Optimal Investment,"
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Econometric Society, vol. 62(1), pages 157-80, January.
- Edlin, Aaron S & Stiglitz, Joseph E, 1995.
"Discouraging Rivals: Managerial Rent-Seeking and Economic Inefficiencies,"
American Economic Review,
American Economic Association, vol. 85(5), pages 1301-12, December.
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- Joseph E. Stiglitz, 1987.
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NBER Working Papers
2189, National Bureau of Economic Research, Inc.
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- Shannon, Chris, 1995. "Weak and Strong Monotone Comparative Statics," Economic Theory, Springer, vol. 5(2), pages 209-27, March.
- Milgrom, Paul, 1994. "Comparing Optima: Do Simplifying Assumptions Affect Conclusions?," Journal of Political Economy, University of Chicago Press, vol. 102(3), pages 607-15, June.
- Mirrlees, James A, 1971. "An Exploration in the Theory of Optimum Income Taxation," Review of Economic Studies, Wiley Blackwell, vol. 38(114), pages 175-208, April.
- Klein, Benjamin & Crawford, Robert G & Alchian, Armen A, 1978. "Vertical Integration, Appropriable Rents, and the Competitive Contracting Process," Journal of Law and Economics, University of Chicago Press, vol. 21(2), pages 297-326, October.
- Milgrom, Paul & Roberts, John, 1994. "Comparing Equilibria," American Economic Review, American Economic Association, vol. 84(3), pages 441-59, June.
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