Comparative statics, informativeness, and the interval dominance order

John K.H. Quah, Bruno Strulovici

Research output: Contribution to journalArticlepeer-review

45 Scopus citations

Abstract

We identify a new way to order functions, called the interval dominance order, that generalizes both the single crossing property and a standard condition used in statistical decision theory. This allows us to provide a unified treatment of the major theorems on monotone comparative statics with and without uncertainty, the comparison of signal informativeness, and a non-Bayesian theorem on the completeness of increasing decision rules. We illustrate the concept and results with various applications, including an application to optimal stopping time problems where the single crossing property is typically violated.

Original languageEnglish (US)
Pages (from-to)1949-1992
Number of pages44
JournalEconometrica
Volume77
Issue number6
DOIs
StatePublished - Nov 2009

Keywords

  • Capital deepening
  • Comparative statics
  • Complete class theorem
  • Informativeness
  • Interval dominance order
  • Optimal stopping time
  • Single crossing property
  • Statistical decision theory
  • Supermodularity

ASJC Scopus subject areas

  • Economics and Econometrics

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