Comparative statics and heterogeneity

Robust Comparative Statics

Comparative Statics, Stability, and Uniqueness

Consider an economic model whose equilibrium can be represented as the …xed point of a system of di¤erentiable equations. Using the theory ofB matrices, I show that comparative statics are well-behaved if the interactions between the equations are not too large, and the negative interactions are not too varied. When there are only positive interactions, for example when strategic complements pr...

Ratio Orderings and Comparative Statics

Monotone ratio orderings are refinements of first order stochastic dominance that allow monotone comparative statics results in games of incomplete information. We develop analogous refinements for second order stochastic dominance based on the monotonicity of the cumulative probability ratio and the unimodality of the likelihood and probability ratios. We go on to investigate comparative stati...

Aggregate comparative statics

In aggregative games, each player’s payoff depends on her own actions and an aggregate of the actions of all the players (for example, sum, product or some moment of the distribution of actions). Many common games in industrial organization, political economy, public economics, and macroeconomics can be cast as aggregative games. In most of these situations, the behavior of the aggregate is of ...

Distributional Comparative Statics

An important set of questions in economics concern how changes in the distribution of economic parameters (income, wealth, productivity, distortions, information, etc.) impact individual choices and market outcomes. We currently do not have tools to answer such questions. In this paper, I develop a theory of distributional comparative statics that addresses this set of issues. Central to the de...