Hennessy, David A.

Economics Letters Vol. 55 (September 1997): 347-353.

If a two-input stochastic reward function is supermodular, then a first-degree stochastic shift increases both inputs, and the more variable factor is more responsive in the long run. These results hold for second-degree dominance under additional curvature conditions.

Author Keywords: Le Chatelier principle; Long run; Short run; Supermodular