74,917 research outputs found
Inference of Signs of Interaction Effects in Simultaneous Games with Incomplete Information, Second Version
This paper studies the inference of interaction effects (impacts of players' actions on each other's payoffs) in discrete simultaneous games with incomplete information. We propose an easily implementable test for the signs of state-dependent interaction effects that does not require parametric specifications of players' payoffs, the distributions of their private signals or the equilibrium selection mechanism. The test relies on the commonly invoked assumption that players' private signals are independent conditional on observed states. The procedure is valid in (but does not rely on) the presence of multiple equilibria in the data-generating process (DGP). As a by-product, we propose a formal test for multiple equilibria in the DGP. We also show how to extend our arguments to identify signs of interaction effects when private signals are correlated. We provide Monte Carlo evidence of the test's good performance in finite samples. We then implement the test using data on radio programming of commercial breaks in the U.S., and infer stations' incentives to synchronize their commercial breaks. Our results support the earlier finding by Sweeting (2009) that stations have stronger incentives.identification, inference, multiple equilibria, incomplete information games
A Semiparametric Test of Agent's Information Sets for Games of Incomplete Information
We propose semiparametric tests of misspecification of agent's information for games of incomplete information. The tests use the intuition that the opponent's choices should not predict a player's choice conditional on the proposed information available to the player. The tests are designed to check against some commonly used null hypotheses (Bajari et al. (2010), Aradillas-Lopez (2010)). We show that our tests have power to discriminate between common alternatives even in small samples. We apply our tests to data on entry in the US airline industry. Both the assumptions of independent and correlated private shocks are not supported by the data
Inference of Signs of Interaction Effects in Simultaneous Games with Incomplete Information
This paper studies the inference of interaction effects, i.e., the impacts of players' actions on each other's payoffs, in discrete simultaneous games with incomplete information. We propose an easily implementable test for the signs of state-dependent interaction effects that does not require parametric specifications of players' payoffs, the distributions of their private signals or the equilibrium selection mechanism. The test relies on the commonly invoked assumption that players' private signals are independent conditional on observed states. The procedure is valid in the presence of multiple equilibria, and, as a by-product of our approach, we propose a formal test for multiple equilibria in the data-generating process. We provide Monte Carlo evidence of the test's good performance in finite samples. We also implement the test to infer the direction of interaction effects in couples' joint retirement decisions using data from the Health and Retirement Study.identification, inference, multiple equilibria, incomplete information games
Inference of Signs of Interaction Effects in Simultaneous Games with Incomplete Information, Second Version
This paper studies the inference of interaction effects, i.e., the impacts of players' actions on each other's payoffs, in discrete simultaneous games with incomplete information. We propose an easily implementable test for the signs of state-dependent interaction effects that does not require parametric specifications of players' payoffs, the distributions of their private signals or the equilibrium selection mechanism. The test relies on the commonly invoked assumption that players' private signals are independent conditional on observed states. The procedure is valid in the presence of multiple equilibria, and, as a by-product of our approach, we propose a formal test for multiple equilibria in the data-generating process. We provide Monte Carlo evidence of the test's good performance infinite samples. We also implement the test to infer the direction of interaction effects in couples' joint retirement decisions using data from the Health and Retirement Study.identification, inference, multiple equilibria, incomplete information games
Econometrics for Learning Agents
The main goal of this paper is to develop a theory of inference of player
valuations from observed data in the generalized second price auction without
relying on the Nash equilibrium assumption. Existing work in Economics on
inferring agent values from data relies on the assumption that all participant
strategies are best responses of the observed play of other players, i.e. they
constitute a Nash equilibrium. In this paper, we show how to perform inference
relying on a weaker assumption instead: assuming that players are using some
form of no-regret learning. Learning outcomes emerged in recent years as an
attractive alternative to Nash equilibrium in analyzing game outcomes, modeling
players who haven't reached a stable equilibrium, but rather use algorithmic
learning, aiming to learn the best way to play from previous observations. In
this paper we show how to infer values of players who use algorithmic learning
strategies. Such inference is an important first step before we move to testing
any learning theoretic behavioral model on auction data. We apply our
techniques to a dataset from Microsoft's sponsored search ad auction system
To Review or Not to Review? Limited Strategic Thinking at the Movie Box Office
Film distributors occasionally withhold movies from critics before their release. Cold openings
provide a natural field setting to test models of limited strategic thinking. In a set of 856 widely
released movies, cold opening produces a significant 15% increase in domestic box office revenue
(though not in foreign markets and DVD sales), consistent with the hypothesis that some moviegoers
do not infer low quality from cold opening. Structural parameter estimates indicate 1–2 steps of
strategic thinking by moviegoers (comparable to experimental estimates). However, movie studios
appear to think moviegoers are sophisticated since only 7% of movies are opened cold
Voting in the Bicameral Congress: Large Majorities as a Signal of Quality
We estimate a model of voting in Congress that allows for dispersed information
about the quality of proposals in an equilibrium context. The results highlight the
effects of bicameralism on policy outcomes. In equilibrium, the Senate imposes an
endogenous supermajority rule on members of the House. We estimate this super-
majority rule to be about four-fifths on average across policy areas. Moreover, our
results indicate that the value of the information dispersed among legislators is significant, and that in equilibrium a large fraction of House members (40-50 %) vote in
accordance with their private information. Taken together, our results imply a highly
conservative Senate, in the sense that proposals are enacted into law only when it is
extremely likely that their quality is high
Intrahousehold Bargaining and Agricultural Technology Adoption : Experimental Evidence from Zambia
This study examines how technology adoption is determined in an intra-household bargaining process between spouses with different incentives and resource constraints. We develop a noncooperative bargaining model in which individual investments affect not only a household’s total income but also its members’ future bargaining position, which can yield Pareto-inferior outcomes. To test for possible inefficiency, we introduce rice seeds to farmers in rural Zambia and randomly distribute vouchers for transportation from the village to a miller in town to husbands and wives. The results show that the identity of the voucher recipients matters for rice seed take-up when wives choose which crop to grow on suitable plots for rice production. We also find that the voucher given to husbands is effective only when they manage the plots by themselves. Furthermore, intra-household information flows are distorted by the recipients. The heterogeneous effects and incomplete information sharing among spouses provide evidence against efficient resource pooling within the family. We present suggestive evidence that limited commitment to the production plan is a key mechanism behind strategic spousal behavior. Overall, this study highlights the importance of directly targeting individuals with productive resources relevant to a technology.This study was financially supported by JSPS KAKENHI No. 16H02733.http://www.grips.ac.jp/list/jp/facultyinfo/kijima-yoko
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