Search Results
Report
Ordinal Complementarity
This paper introduces ordinal complementarity: a feature of stochastic production functions that is robust to monotonic transformations of inputs X and output Y. It has two equivalent definitions: supermodularity of the conditional survival function under a first-order stochastic dominance ordering, and supermodularity of E[Q(Y )|X] for all non-decreasing valuations Q. Relative to existing conventions, this definition offers a strengthening with more robust policy implications. Ordinal complementarity is necessary and sufficient for a number of social planner problems to have monotone ...