Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/253448 
Year of Publication: 
2020
Citation: 
[Journal:] Theoretical Economics [ISSN:] 1555-7561 [Volume:] 15 [Issue:] 2 [Publisher:] The Econometric Society [Place:] New Haven, CT [Year:] 2020 [Pages:] 445-476
Publisher: 
The Econometric Society, New Haven, CT
Abstract: 
We define and explore the No-Upward-Crossing NUC, a condition satisfied by every parameterized family of distributions commonly used in economic applications. Under smoothness assumptions, NUC is equivalent to log-supermodularity of the negative of the derivative of the distribution with respect to the parameter. It is characterized by a natural monotone comparative static, and is central in establishing quasi-concavity in a family of decision problems. As an application, we revisit the first-order approach to the moral hazard problem. NUC simplifies the relevant conditions for the validity of the first-order approach and gives them an economic interpretation. We provide extensive analysis of sufficient conditions for the first-order approach for exponential families.
Subjects: 
Log-supermodularity
quasi-concavity
moral hazard
first-order approach
JEL: 
D81
D86
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article

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