Robust Comparative Statics of Non-monotone Shocks in Large Aggregative Games

Carmen Camacho, Takashi Kamihigashi and Çağrı Sağlam

No DP2015-25, Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University

Abstract: A policy change that involves redistribution of income or wealth is typically controversial, affecting some people positively but others negatively. In this paper we extend the "robust comparative statics" result on large aggregative games established by Acemoglu and Jensen (2010, 49th IEEE Conference on Decision and Control, 3133-3139) to possibly controversial policy changes. In particular, we show that both the smallest and the largest equilibrium values of an aggregate variable increase in response to a policy change to which individuals' reactions may be mixed but the overall aggregate response is positive. We provide sufficient conditions for such a policy change in terms of distributional changes in parameters.

Keywords: Large aggregative games; Robust comparative statics; Positive shocks; Stochastic dominance; Mean-preserving spreads (search for similar items in EconPapers)
Pages: 19 pages
Date: 2015-06
New Economics Papers: this item is included in nep-mic
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https://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2015-25.pdf First version, 2015 (application/pdf)

Related works:
Journal Article: Robust comparative statics for non-monotone shocks in large aggregative games (2018)
Working Paper: Robust comparative statics of non-monotone shocks in large aggregative games (2018)
Working Paper: Robust comparative statics of non-monotone shocks in large aggregative games (2018)
Working Paper: Robust Comparative Statics for Non-monotone Shocks in Large Aggregative Games (2017)
Working Paper: Robust Comparative Statics for Non-monotone Shocks in Large Aggregative Games (2016)
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