Comparative Statics for Optimal Stopping Problems in Nonstationary Environments
How do decisions change with the economic environment and with time? This paper studies general nonstationary stopping problems and provides the methodological tools to answer these questions. First, we identify conditions that ensure a monotone relation between decisions' timing and outcomes. These conditions apply to a prevalent class of economic environments. Second, we develop a theory of monotone comparative statics for stopping problems, offering general and unifying qualitative insights into the decision-maker's value and stopping behavior. We apply our results to models of information acquisition, bankruptcy, irreversible investment, and option pricing to explain documented patterns at odds with current theories.
Code (0)
등록된 구현이 없습니다.
Methods 이 논문이 사용한 방법론
Similar Papers 제목 키워드 기반
Weak Monotone Comparative Statics
We develop a theory of monotone comparative statics based on weak set order -- in short, weak monotone comparative statics -- and identify the enabling conditions in the context of individual choices, Pareto optimal choi…
On an Irreversible Investment Problem with Two-Factor Uncertainty
We consider a real options model for the optimal irreversible investment problem of a profit maximizing company. The company has the opportunity to invest into a production plant capable of producing two products, of whi…
Vocal Bursts Valence PredictionThe comparative statics of persuasion
In the persuasion model, apart from a few special cases, comparative statics has been an open question. We answer it, delineating which shifts of the sender's interim payoff lead her optimally to choose a more informativ…
Open-Ended Question AnsweringComparative statics with adjustment costs and the Le Chatelier principle
We develop a theory of monotone comparative statics for models with adjustment costs. We show that comparative-statics conclusions may be drawn under the usual ordinal complementarity assumptions on the objective functio…
validMonotone Comparative Statics for Equilibrium Problems
We introduce a notion of substitutability for correspondences and establish a monotone comparative static result, unifying results such as the inverse isotonicity of M-matrices, Berry, Gandhi and Haile's identification o…