Comparative Statics under Uncertainty for a Decision Model with Two Choice Variables

Gyemyung Choi ; Iltae Kim

Head of Research Department, Financial Supervisory Service, Seoul, Republic of Korea, Tel: +82-2-3786-7880 choi0612@fss.or.kr
Associate Professor, Department of Economics, Chonnam National University, Kwangju 500-757, Republic of Korea, Tel: +82-62-530-1550 kit2603@chonnam.ac.kr

JEL Classification: D81

Abstract

This paper considers a class of monotone comparative statics problems that satisfies two distinct kinds of constraints on the decision model, where a single decision-maker has two-dimensional choice set. By using a general model we can present a set of sufficient conditions for the first choice variable to be decreased but the second choice to be increased in response to three types of changes in randomness.

Keywords:

Two-dimensional choice set, General model, Changes in randomness

Acknowledgments

The authors are grateful to three anonymous referees for helpful suggestions and comments on an earlier version of the paper.

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