Monotone Comparative Statics: Geometric Approach |
| |
Authors: | B H Strulovici T A Weber |
| |
Institution: | (1) Nuffield College, Oxford University, Oxford, UK;(2) Department of Management Science and Engineering, 442 Terman Engineering Center, Stanford University, Stanford, CA 94305-4026, USA |
| |
Abstract: | We consider the comparative statics of solutions to parameterized optimization problems. A geometric method is developed for
finding a vector field that, at each point in the parameter space, indicates a direction in which monotone comparative statics
obtains. Given such a vector field, we provide sufficient conditions under which the problem can be reparameterized on the
parameter space (or a subset thereof) in a way that guarantees monotone comparative statics. A key feature of our method is
that it does not require the feasible set to be a lattice and works in the absence of the standard quasi-supermodularity and
single-crossing assumptions on the objective function. We illustrate our approach with a variety of applications.
We are grateful to Kenneth Arrow, Darrell Duffie, David Luenberger, Paul Milgrom, John Quah, and Pete Veinott for helpful
comments.
Research in part supported by a David Morgenthaler II Faculty Scholar Award. |
| |
Keywords: | Change of parameters Parameterized optimization problems Single-crossing Supermodularity |
本文献已被 SpringerLink 等数据库收录! |
|