Comparative Statics, Informativeness, and the Interval Dominance Order

John Quah and Bruno Strulovici

No 2007-W04, Economics Papers from Economics Group, Nuffield College, University of Oxford

Abstract: We identify a natural way of ordering functions, which we call the interval dominance order and develop a theory of monotone comparative statics based on this order. This way of ordering functions is weaker then the standard one based on the single crossing property (Milgrom and Shannon, 1994) and so our results apply in some settings where the single crossing property does not hold. For example, they are useful when examining the comparative statics of optimal stopping time problems. We also show that certain basic results in statistical decision theory which are important in economics – specifically, the complete class theorem of Karlin and Rubin (1956) and the results connected with Lehmann’s (1988) concept of informativeness – generalize to payoff functions obeying the interval dominance order.

Keywords: single crossing property; interval dominance order; supermodularity; comparative statics; optimal stopping time; complete class theorem; statistical decision theory; informativeness (search for similar items in EconPapers)
JEL-codes: C61 D11 D21 F11 G11 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2007-09-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Related works:
Journal Article: Comparative Statics, Informativeness, and the Interval Dominance Order (2009)
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