| Report ID: | 06-06-291942-25 |
| Initial Submission Date: | 2006-06-29 |
| Title: | Monotone Comparative Statics: A Geometric Approach |
| Summary: | We consider 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 obtain. 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. |
| Authors: | Strulovici, Bruno; Weber, Thomas |
| Contact email: | webert@stanford.edu |
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