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Comparative Static Analysis (comparative + static_analysis)

Distribution by Scientific Domains
Business, Economics, Finance and Accounting33%

Selected Abstracts

Pareto-Improving Redistribution and Pure Public Goods

GERMAN ECONOMIC REVIEW, Issue 2 2000
Richard Cornes
In the pure public good model, the Nash equilibrium associated with one initial income distribution may Pareto dominate the equilibrium associated with another distribution of the same aggregate income. We explore this possibility and examine its implications for Pareto-improving policy intervention by undertaking a comparative static analysis of Pareto-improving tax-financed increases in pure public good provision. Under some circumstances, a government can engineer policies that raise public good provision while increasing the well-being of contributors and non-contributors. Crucial factors promoting this outcome involve a large number of non-contributors, a high marginal valuation for the public good by non-contributors and a large aggregate response of contributors to changes in their income. [source]

The Effect of a Change in Wages on Welfare in a Two,Class Monocentric City

JOURNAL OF REGIONAL SCIENCE, Issue 1 2003
Youngsun Kwon
This paper performs a comparative static analysis to derive the effect of a change in the wages of the rich living in the suburban area of a city on the welfare of the poor living in the central area of the city. It assumes that commuting cost is a function of distance and wages. A sufficient condition for an increase in the wages of the rich to harm the welfare of the poor is that the time cost of commuting is greater than the operating cost of commuting. [source]

How Does Economic Development in Eastern Europe Affect Austria's Regions?

JOURNAL OF REGIONAL SCIENCE, Issue 2 2002
A Multiregional General Equilibrium Framework
The paper quantifies regional welfare effects arising from the increasing trade flows between Austria and its Eastern neighbors after the opening up of Eastern Europe. We calibrate a static multiregional Computable General Equilibrium (CGE) model with benchmark data from 1994 for Austria, subdivided into nine Federal Provinces. The regions are linked by trade flows with the four Eastern neighboring countries and with the rest of the world. We simulate the effects of the increase of trade interpenetration as observed between 1989 and 1999 in a comparative static analysis. Regional welfare effects under fixed and flexible wages are presented. We also compare national CGE results with estimates obtained in a simple partial equilibrium approach. [source]

The Exclusion Theorem in the Weberian Space

JOURNAL OF REGIONAL SCIENCE, Issue 1 2000
Song-Ken Hsu
In this paper we employ a unifying approach to examine the exclusion theorem in a Weberian space under various types of uncertainty: input price or output price uncertainty, transport rate uncertainty, and technology uncertainty. The novelty of our approach is the usage of second-order conditions and comparative static analysis in the derivation of conditions for thevalidity of the exclusion theorem. Our main results are new and some are generalizations of those obtained in prior studies. [source]

AN OBTRUSIVE REMARK ON CAPITAL AND COMPARATIVE STATICS

METROECONOMICA, Issue 1 2009
Gaetano 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]

Locational tying of complementary retail items

NAVAL RESEARCH LOGISTICS: AN INTERNATIONAL JOURNAL, Issue 5 2009
Bacel Maddah
Abstract We study a selling practice that we refer to as locational tying (LT), which seems to be gaining wide popularity among retailers. Under this strategy, a retailer "locationally ties" two complementary items that we denote by "primary" and "secondary." The retailer sells the primary item in an appropriate "department" of his or her store. To stimulate demand, the secondary item is offered in the primary item's department, where it is displayed in very close proximity to the primary item. We consider two variations of LT: In the multilocation tying strategy (LT-M), the secondary item is offered in its appropriate department in addition to the primary item's department, whereas in the single-location tying strategy (LT-S), it is offered only in the primary item's location. We compare these LT strategies to the traditional independent components (IC) strategy, in which the two items are sold independently (each in its own department), but the pricing/inventory decisions can be centralized (IC-C) or decentralized (IC-D). Assuming ample inventory, we compare and provide a ranking of the optimal prices of the four strategies. The main insight from this comparison is that relative to IC-D, LT decreases the price of the primary item and adjusts the price of the secondary item up or down depending on its popularity in the primary item's department. We also perform a comparative statics analysis on the effect of demand and cost parameters on the optimal prices of various strategies, and identify the conditions that favor one strategy over others in terms of profitability. Then we study inventory decisions in LT under exogenous pricing by developing a model that accounts for the effect of the primary item's stock-outs on the secondary item's demand. We find that, relative to IC-D, LT increases the inventory level of the primary item. We also link the profitability of different strategies to the trade-off between the increase in demand volume of the secondary item as a result of LT and the potential increase in inventory costs due to decentralizing the inventory of the secondary item. © 2009 Wiley Periodicals, Inc. Naval Research Logistics 2009 [source]