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Economic Theory

, Volume 66, Issue 3, pp 763–786 | Cite as

Sensitivity analysis of boundary equilibria

  • Alan Beggs
Research Article

Abstract

This paper studies the sensitivity of economic equilibria to perturbations when the implicit function theorem cannot be applied on account of the presence of boundaries. It presents results from the mathematical programming literature which provide conditions under which equilibria are robust to perturbation and are locally unique Lipschitz continuous functions of parameters. Economic applications include search equilibrium, Cournot equilibrium and general equilibrium.

Keywords

Sensitivity analysis Implicit function theorem Equilibria Variational inequalities Boundaries 

JEL Classification

C61 C62 

Notes

Acknowledgments

I am grateful to an anonymous referee for helpful comments.

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Copyright information

© Springer-Verlag Berlin Heidelberg 2016

Authors and Affiliations

  1. 1.Wadham CollegeOxford UniversityOxfordUK

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