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Directional monotone comparative statics

Anne-Christine Barthel () and Tarun Sabarwal ()
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Anne-Christine Barthel: West Texas A & M University

Economic Theory, 2018, vol. 66, issue 3, 557-591

Abstract: Abstract Many questions of interest in economics can be stated in terms of monotone comparative statics: If a parameter of a constrained optimization problem increases, when does its solution increase as well. We characterize monotone comparative statics in different directions in finite-dimensional Euclidean space by extending the monotonicity theorem of Milgrom and Shannon (Econometrica 62(1):157–180, 1994) to constraint sets ordered in Quah (Econometrica 75(2):401–431, 2007)’s set order. Our characterizations are ordinal and retain the same flavor as their counterparts in the standard theory, showing new connections to the standard theory and presenting new results. The results are highlighted with several applications (in consumer theory, producer theory, and game theory) which were previously outside the scope of the standard theory of monotone comparative statics.

Keywords: Monotone comparative statics; i-Directional single crossing property; i-Directional set order; Quasisupermodular function (search for similar items in EconPapers)
JEL-codes: C61 C70 D00 (search for similar items in EconPapers)
Date: 2018
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