Econometrica: Jan 1994, Volume 62, Issue 1

Monotone Comparative Statics

https://doi.org/0012-9682(199401)62:1<157:MCS>2.0.CO;2-P
p. 157-180

Chris Shannon, Paul Milgrom

We derive a necessary and sufficient condition for the solution set of an optimization problem to be monotonic in the parameters of the problem. In addition, we develop practical methods for checking the condition and demonstrate its applications to the classical theories of the competitive firm, the monopolist, the Bertrand oligopolist, consumer and growth theory, game theory, and general equilibrium analysis.

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