Comparative statics is a well established research field where one analyzes how marginal changes in parameters of a strategic game affect the resulting equilibria. While classic comparative statics is mainly concerned with qualitative approaches (e.g., deciding whether a parameter change improves or hurts equilibrium profits or welfare), we provide a framework to expose the extend (not monotonicity) of a discrete (not marginal) parameter change , with the additional benefit that our results can even be used when there is uncertainty about the exact model instance. We apply our quantitative approach to the multimarket oligopoly model introduced by Bulow, Geanakoplos and Klemperer (1985). They describe the counterintuitive example of a positive price shock in the firm's monopoly market resulting in a reduction of the firm's equilibrium profit. We  quantify for the first time the worst case profit reduction for multimarket oligopolies with an arbitrary number of markets exhibiting arbitrary positive price shocks. For markets with affine price functions and firms with convex cost technologies, we show that the relative  loss of any firm is at most 25\% no matter how many firms compete in the oligopoly. We further investigate the impact of positive price shocks on total profit of all firms as well as on consumer surplus . We find tight bounds also for these measures showing that total profit and consumer surplus decreases by at most 25\% and 16.6\%, respectively  .
We introduce a quantitative approach to comparative statics that allows to bound the maximum effect of an exogenous parameter change on a system's equilibrium. The motivation for this approach is a well known paradox in multimarket Cournot competition, where a positive price shock on a monopoly market may actually reduce the monopolist's profit. We use our approach to quantify for the first time the worst case profit reduction for multimarket oligopolies exposed to arbitrary positive price shocks. For markets with affine price functions and firms with convex cost technologies, we show that the relative profit loss of any firm is at most 25\% no matter how many firms compete in the oligopoly. We further investigate the impact of positive price shocks on total profit of all firms as well as on social welfare . We find tight bounds also for these measures showing that total profit and social welfare decreases by at most 25\% and 16.6\%, respectively . Finally, we show that in our model, mixed, correlated and coarse correlated equilibria are essentially unique, thus, all our bounds apply to these game solutions as well .
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Comparative statics is a well established research field where one analyzes how marginal changes in parameters of a strategic game affect the resulting equilibria. While classic comparative statics is mainly concerned with qualitative approaches (e.g., deciding whether a parameter change improves or hurts equilibrium profits or welfare), we provide a framework to expose the extend (not monotonicity) of a discrete (not marginal) parameter change , with the additional benefit that our results can even be used when there is uncertainty about the exact model instance. We apply our quantitative approach to the multimarket oligopoly model introduced by Bulow, Geanakoplos and Klemperer (1985). They describe the counterintuitive example of
We introduce a quantitative approach to comparative statics that allows to bound the maximum effect of an exogenous parameter change on a system's equilibrium. The motivation for this approach is a well known paradox in multimarket Cournot competition, where
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in the firm's monopoly market resulting in a reduction of the firm's equilibrium
on a monopoly market may actually reduce the monopolist's
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use our approach to
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with an arbitrary number of markets exhibiting arbitrary
exposed to arbitrary
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profit
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consumer surplus
social welfare
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consumer surplus
social welfare
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. Finally, we show that in our model, mixed, correlated and coarse correlated equilibria are essentially unique, thus, all our bounds apply to these game solutions as well