Strict Monotonicity in Comparative Statics
Posted: 12 Aug 1998
Abstract
Economists commonly seek to show that one variable increases in response to changes in another variable. This paper provides sufficient conditions to draw such strict monotone comparative statics conclusions in optimization problems with and without binding constraints. These results extend the lattice-theoretic results of Milgrom and Shannon (1994) by imposing a stronger differential version of the single crossing property and arguing from first-order conditions. We illustrate the importance of these results through applications involving holdup problems, optimal tax problems, and modern manufacturing.
JEL Classification: C61
Suggested Citation: Suggested Citation
Edlin, Aaron S. and Shannon, Chris, Strict Monotonicity in Comparative Statics. Available at SSRN: https://ssrn.com/abstract=114535
Feedback
Feedback to SSRN
If you need immediate assistance, call 877-SSRNHelp (877 777 6435) in the United States, or +1 212 448 2500 outside of the United States, 8:30AM to 6:00PM U.S. Eastern, Monday - Friday.