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Comparative Statics (comparative + static)
Terms modified by Comparative Statics Selected AbstractsAN OBTRUSIVE REMARK ON CAPITAL AND COMPARATIVE STATICSMETROECONOMICA, Issue 1 2009Gaetano Bloise ABSTRACT We present a simple comparative statics analysis of steady-state equilibria in overlapping generations economies with capital accumulation. We regard comparative statics as paradoxical whenever an exogenous increase in saving propensity induces a decrease (an increase) in consumption at the steady state when interest rate is positive (negative). It is shown that there is an exact relation between paradoxical comparative statics and a perverse intersection of properly identified curves of demand for and supply of capital in value. The demand curve for capital in value coincides with that of neo-Ricardian analysis. We relate our conclusions to some old and recent issues in capital theory. [source] A COMPLETE THEORY OF COMPARATIVE STATICS FOR DIFFERENTIABLE OPTIMIZATION PROBLEMSMETROECONOMICA, Issue 1 2006M. Hossein Partovi ABSTRACT A new comparative statics formalism using generalized compensated derivatives is presented that, in contrast to existing methodologies, directly yields constraint-free semidefiniteness results for any differentiable, constrained optimization problem. The formalism provides a natural and powerful method of constructing comparative statics results, free of constraints and unrestricted in scope. New results on envelope relations, invariance conditions, rank inequalities and non-uniqueness are derived that greatly extend their utility and reach. The methodology is illustrated by deriving the comparative statics of multiple linear constraint utility maximization models and the principal-agent problem with hidden actions, both highly nontrivial and hitherto unsolved problems. [source] Fixed-Reimbursement Insurance: Basic Properties and Comparative StaticsJOURNAL OF RISK AND INSURANCE, Issue 2 2003Louis Eeckhoudt In a number of settings, insurance contracts specify a fixed reimbursement in the event of a loss which is not conditioned on the size of the realized loss. In this article, we explore the theoretical properties of this form of insurance and draw comparisons with other types of insurance policies, such as those based on coinsurance and deductibles. We also examine links between our results and those from the literature on precautionary saving. [source] Comparative Statics for a Decision Model with Two Choice Variables and Two Random Variables: A Mean,Standard Deviation ApproachTHE MANCHESTER SCHOOL, Issue 4 2001Gyemyung Choi The decision model with two choice variables and two random variables, an extension of Feder, or Just and Pope, is examined here. Under the mean,standard deviation framework we derive the comparative statics results concerning the effects of a change in the mean, variance and covariance of the random parameters. Some restrictions on the random variables and on the decision model are considered for unambiguous comparative statics predictions. [source] Agroecosystem modeling and optimal economic decisions: Implications for sustainable agricultureOPTIMAL CONTROL APPLICATIONS AND METHODS, Issue 1 2008Craig A. Bond Abstract We adapt a biogeochemical model of an agroecosystem to account for optimal economic behavior on the part of agricultural producers. Two institutional management regimes are considered: one in which a representative producer does not account for stock pollution caused by use of agricultural inputs, and one in which the externality is internalized. Comparative statics of the steady state of the former problem are analyzed in order to gain insight into the effects of potential policy and technological changes. Results show that a more realistic ecosystem component that includes nutrient cycling can qualitatively change optimal management practices relative to a one-state representation, potentially rendering systems ,unsustainable' under some criteria and leading to policy instruments that exacerbate, rather than mitigate, external damages or the resource base. Moreover, the qualitative effect of changes in model parameters are not necessarily uniform across different agricultural systems, implying that a prescription for the so-called ,sustainable' management under one system may have unintended consequences under another system. Copyright © 2007 John Wiley & Sons, Ltd. [source] Updating an input,output table for use in policy analysisAUSTRALIAN JOURNAL OF AGRICULTURAL & RESOURCE ECONOMICS, Issue 4 2000Benjamin L. Buetre The long lag in the publication of input,output tables is one of the central constraints in applied general equilibrium analysis. Model builders often use out-dated databases leading to analyses that are inappropriate for the policy questions being addressed. This occurs particularly when there exists a significant structural change in the economy. We discuss the updating of an input,output table of the Philippines by simulation technique. A detailed computable general equilibrium model of the Philippine economy with comparative static and forecasting capabilities is utilised. The data are drawn from known percentage changes of macroeconomic variables such as those in the national accounts and structural variables such as employment and output by industry. [source] Dynamic Competition with Experience GoodsJOURNAL OF ECONOMICS & MANAGEMENT STRATEGY, Issue 1 2006J. Miguel Villas-Boas This paper considers dynamic competition in the case in which consumers are only able to learn about their preferences for a certain product after experiencing it. After trying a product a consumer has more information about that product than about untried products. When competing in such a market firms with more sales in the past have an informational advantage because more consumers know their products. If products provide a better-than-expected fit with greater likelihood, taking advantage of that informational advantage may lead to an informational disadvantage in the future. This paper considers this competition with an infinite horizon model in a duopoly market with overlapping generations of consumers. Two effects are identified: On one hand marginal forward-looking consumers realize that by purchasing a product in the current period will be charged a higher expected price in the future. This effect results in reduced price sensitivity and higher equilibrium prices. On the other hand, forward-looking firms realize that they gain in the future from having a greater market share in the current period and compete more aggressively in prices. For similar discount factors for consumers and firms, the former effect is more important, and prices are higher the greater the informational advantages. The paper also characterizes oscillating market share dynamics, and comparative statics of the equilibrium with respect to consumer and firm patience, and the importance of the experience in the ex post valuation of the product. [source] Quality improvement through consumer sorting and disposalAGRIBUSINESS : AN INTERNATIONAL JOURNAL, Issue 4 2009Peyton Ferrier Sorting allows consumers to capture the value of quality differences. As higher quality goods are removed, the value of the seller's remaining stock falls, lowering the price and profits. Bundling and other marketing mechanisms can discourage sorting and prevent the depreciation of the seller's stock. With comparative statics and simulations, the author shows that sellers can increase expected quality and profits by committing to discard a proportion of their resale stock after sorting occurs. In this manner, sorting acts similarly to agricultural grading. [EconLit Classification: Q1, Q11, Q13, L0, L1, D8, D82]. © 2009 Wiley Periodicals, Inc. [source] Open access harvesting of wildlife: the poaching pit and conservation of endangered speciesAGRICULTURAL ECONOMICS, Issue 1 2003Erwin H. Bulte Abstract We extend the traditional G,S model of open access by defining a non-concave harvesting function. We demonstrate the possible existence of multiple equilibria and perverse comparative statics and show that small changes in the underlying economic parameters may trigger large jumps in species' abundance. Finally, we briefly discuss implications for management. [source] Optimal Policy under Uncertainty and Learning about Climate Change: A Stochastic Dominance ApproachJOURNAL OF PUBLIC ECONOMIC THEORY, Issue 5 2009ERIN BAKER Global climate change presents a classic problem of decision making under uncertainty with learning. We provide stochastic dominance theorems that provide new insights into when abatement and investment into low carbon technology should increase in risk. We show that R&D into low-carbon technologies and near-term abatement are in some sense opposites in terms of risk. Abatement provides insurance against the possibility of major catastrophes; R&D provides insurance against the possibility that climate change is marginally worse than average. We extend our results to the comparative statics of learning. [source] AN OBTRUSIVE REMARK ON CAPITAL AND COMPARATIVE STATICSMETROECONOMICA, Issue 1 2009Gaetano Bloise ABSTRACT We present a simple comparative statics analysis of steady-state equilibria in overlapping generations economies with capital accumulation. We regard comparative statics as paradoxical whenever an exogenous increase in saving propensity induces a decrease (an increase) in consumption at the steady state when interest rate is positive (negative). It is shown that there is an exact relation between paradoxical comparative statics and a perverse intersection of properly identified curves of demand for and supply of capital in value. The demand curve for capital in value coincides with that of neo-Ricardian analysis. We relate our conclusions to some old and recent issues in capital theory. [source] LONG RUN DEMAND FOR LABOUR IN THE CONSUMER GOOD INDUSTRYMETROECONOMICA, Issue 2 2006Article first published online: 24 APR 200, Ian Steedman ABSTRACT We consider, for alternative models of production, the comparative statics of constant-returns economies in long run competitive equilibrium, for which reswitching, capital-reversing and consumption-reversal are all completely absent. Notwithstanding the ,well-behaved' nature of these economies, the use of labour per unit of output in the consumer good industry is always positively related to the real wage rate. [source] A COMPLETE THEORY OF COMPARATIVE STATICS FOR DIFFERENTIABLE OPTIMIZATION PROBLEMSMETROECONOMICA, Issue 1 2006M. Hossein Partovi ABSTRACT A new comparative statics formalism using generalized compensated derivatives is presented that, in contrast to existing methodologies, directly yields constraint-free semidefiniteness results for any differentiable, constrained optimization problem. The formalism provides a natural and powerful method of constructing comparative statics results, free of constraints and unrestricted in scope. New results on envelope relations, invariance conditions, rank inequalities and non-uniqueness are derived that greatly extend their utility and reach. The methodology is illustrated by deriving the comparative statics of multiple linear constraint utility maximization models and the principal-agent problem with hidden actions, both highly nontrivial and hitherto unsolved problems. [source] Consumer Substitution Effects under Full Industry EquilibriumMETROECONOMICA, Issue 1 2004Ian Steedman ABSTRACT To be of practical use comparative statics must be able to compare long-period equilibria. Such equilibria will almost never have price vectors that are proportional with respect to all prices but one,yet such price vectors are precisely those underlying the usual substitution effect analysis. We consider how this tension may be resolved. [source] INTERNATIONAL BIODIVERSITY CONSERVATION AGREEMENTSNATURAL RESOURCE MODELING, Issue 3 2003HARRY CLARKE ABSTRACT. A public goods model of global biodiversity conservation is exposited. Distinguishing features of global biodiversityconservation tasks are identified. Global efficiencyof biodiversityconservation is discussed and some comparative statics of efficient programs provided. The transfers required from high-existence-value, low-conservation-productivitynations to low-existence-value, high-conservation-productivitynations, to realize global efficiencyin conservation effort, are analyzed. [source] NATURAL RESOURCE EXPLOITATION UNDER COMMON PROPERTY RIGHTSNATURAL RESOURCE MODELING, Issue 1 2003MICHAEL R. CAPUTO ABSTRACT. Renewable natural resources such as ground-water, pastures and fisheries are often governed bycommon propertyrights in which members of a group jointlyown the exclusive use of the resource. We develop a formal model of a common propertycontract based on differential game theory and then use the model to examine (i) the incentives of individual users of the common resource; (ii) the resulting harvest and stock time paths; (iii) the local stabilityof the steady state; and (iv) the steadystate comparative statics. Moreover, we compare the qualitative properties of the common propertyregime to those generated under perfectlydefined private rights and open access. We show how common prop-ertyownership of natural resources can generate rent and be a second-best solution when private propertyrights are costly to establish. [source] Optimal timing of switches between product sales for sports and entertainment ticketsNAVAL RESEARCH LOGISTICS: AN INTERNATIONAL JOURNAL, Issue 1 2008Matthew J. Drake Abstract Like airlines and hotels, sports teams and entertainment venues can benefit from revenue management efforts for their ticket sales. Teams and entertainment venues usually offer bundles of tickets early in their selling horizon and put single-event tickets on sale at a later date; these organizations must determine the best time to offer individual tickets because both types of ticket sales consume the same fixed inventory. We model the optimal a priori timing decision for a seller with a fixed number of identical tickets to switch from selling the tickets as fixed bundles to individual tickets to maximize the revenue realized before the start of the performance season. We assume that bundle and single-ticket customers each arrive according to independent, nonhomogeneous Markovian death processes with a linear death rate that can vary over time and that the benefit from selling a ticket in a package is higher than from selling the ticket individually. We characterize the circumstances in which it is optimal for the seller to practice mixed bundling and when the seller should only sell bundles or individual tickets, and we establish comparative statics for the optimal timing decision for the special case of constant customer arrival rates. We extend our analytical results to find the optimal time for offering two groups of tickets with high and low demand. Finally, we apply the timing model to a data set obtained from the sports industry. © 2007 Wiley Periodicals, Inc. Naval Research Logistics, 2008 [source] DUALITY WITH SECTOR-SPECIFIC EXTERNALITIES UNDER SOCIAL CONSTANT RETURNS,THE JAPANESE ECONOMIC REVIEW, Issue 4 2006KAZUO NISHIMURA We develop dual approaches to quantity and price relationships of production in a general multisectoral model with sector-specific externalities. The production of each good exhibits socially constant returns to scale but privately decreasing returns. We find that the Stolper-Samuelson theorem holds for factor intensity ranking from the social perspective and that the Rybczynski theorem holds for factor intensity ranking from the private perspective. The price-output dual fails to hold in general. Moreover, we re-establish the Heckscher-Ohlin theorem in the two-sector case, as well as the factor endowment,factor price and price-output comparative statics in the high-dimension case under proper conditions. [source] Reporting Bias and Information Discrepancy, and Consequences for Volatility in Financial Markets,ASIA-PACIFIC JOURNAL OF FINANCIAL STUDIES, Issue 5 2010Jae Joon Han D8; D53; G14 Abstract This paper presents an analytical explanation of price volatility and mispricing in a rational financial market. In the proposed model, specialists might have private interest in manipulating their reports, which can affect the security price. Additionally, traders differ in terms of both rationality and available information. The present study shows that mispricing and price volatility occurs in a rational financial market when specialist reports are incorporated under different trader types. Also analyzed are comparative statics of the magnitude of misreports, the informativeness of the price, and price volatility when the ratio of superior traders to ordinary traders changes. Both price volatility and the potential for extra profit gain by superior traders might increase when they are dominant. [source] Relative risk aversion, relative prudence and comparative statics under uncertainty: The case of (,, ,)-preferencesBULLETIN OF ECONOMIC RESEARCH, Issue 2 2004Thomas Eichner D81; D21 Abstract From the expected-utility approach, relative risk aversion being smaller than one and relative prudence being smaller than two emerge as preference restrictions that fully determine the optimal responses of decisions under uncertainty to certain shifts in probability distributions. We characterize the magnitudes of relative risk aversion and relative prudence in terms of the two-parameter, mean-standard deviation approach. We demonstrate that this characterization is instrumental in obtaining comparative static results in the two-parameter setting. We further relate our findings to the results in the expected-utility framework. [source] | |||||||||||||||||||