General theory of equilibrium in models with complementarities

Tarun Sabarwal

Journal of Economic Theory, 2025, vol. 224, issue C

Abstract: We provide a new and general theory of order nearest comparative statics for subsets of equilibria in models with complementarities used widely in economics and other disciplines. Order nearest equilibria are motivated naturally in the theory of monotone comparative statics of equilibrium, but their existence does not follow from results based on weak set order or strong set order, in general. We provide such results and develop the general theory using weak monotonicity of selections from best response correspondences and two new set comparison relations: Star complete relation and star lattice relation. We do not require any continuity properties. Our results hold for standard models with complementarities prevalent in the literature and allow for new cases.

Keywords: Complementarities; Equilibrium; Fixed point; Strategic complements; Monotone comparative statics (search for similar items in EconPapers)
JEL-codes: C62 C72 D70 (search for similar items in EconPapers)
Date: 2025
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Working Paper: General theory of equilibrium in models with complementarities (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:224:y:2025:i:c:s0022053125000213

DOI: 10.1016/j.jet.2025.105975

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