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

Using matching, instrumental variables and control functions to estimate economic choice models

This paper investigates four topics. (1) It examines the different roles played by the propensity score (probabilitiy of selection) in matching, instrumental variable and control functions methods. (2) It contrasts the roles of exclusion restrictions in matching and selection models. (3) It characterizes the sensivity of matching to the choice of conditioning variables and demonstrates the greater robustness of control function methods to misspecification of the conditioning variables. (4) It demonstrates the problem of choosing the conditioning variables in matching and the failure of conventional model selection criteria when candidate conditioning variables are not exogenous.Propensity score; matching; selection models

Dynamic Discrete Choice and Dynamic Treatment Effects

This paper considers semiparametric identification of structural dynamic discrete choice models and models for dynamic treatment effects. Time to treatment and counterfactual outcomes associated with treatment times are jointly analyzed. We examine the implicit assumptions of the dynamic treatment model using the structural model as a benchmark. For the structural model we show the gains from using cross equation restrictions connecting choices to associated measurements and outcomes. In the dynamic discrete choice model, we identify both subjective and objective outcomes, distinguishing ex post and ex ante outcomes. We show how to identify agent information sets.

Separating uncertainty from heterogeneity in life cycle earnings

This paper develops and applies a method for decomposing cross section variability of earnings into components that are forecastable at the time students decide to go to college (heterogeneity) and components that are unforecastable. About 60 % of variability in returns to schooling is forecastable. This has important implications for using measured variability to price risk and predict college attendance.earnings; unforecastable; forecastable

Using Matching, Instrumental Variables and Control Functions to Estimate Economic Choice Models

This paper investigates four topics. (1) It examines the different roles played by the propensity score (probability of selection) in matching, instrumental variable and control functions methods. (2) It contrasts the roles of exclusion restrictions in matching and selection models. (3) It characterizes the sensitivity of matching to the choice of conditioning variables and demonstrates the greater robustness of control function methods to misspecification of the conditioning variables. (4) It demonstrates the problem of choosing the conditioning variables in matching and the failure of conventional model selection criteria when candidate conditioning variables are not exogenous.

How The Timing of Grade Retention Affects Outcomes: Identification and Estimation of Time-Varying Treatment Effects

Increasingly, grade retention is viewed as an important alternative to social promotion, yet evidence to date is unable to disentangle how the effect of grade retention varies by abilities and over time. The key challenge is differential selection of students into retention across grades and by abilities. Because existing quasi-experimental methods cannot address this question, we develop a new strategy that is a hybrid between a control function and a generalization of the fixed effects approach. Applying our method to nationally-representative, longitudinal data, we find evidence of dynamic selection into retention and that the treatment effect of retention varies considerably across grades and unobservable abilities of students. Our strategy can be applied more broadly to many time-varying or multiple treatment settings.time-varying treatments, dynamic selection, grade retention, factor analysis

La lutte contre la fraude n'a pas de frontières dans l'UE

A veces las normas de la Unión Europea que pretenden promover la libre prestación de servicios y la libre circulación de los trabajadores con objeto de favorecer la interpenetración económica, evitando complicaciones administrativas, como pueden ser las que regulan la emisión y utilización de los certificados E-101 o A1, son utilizadas fraudulentamente para obtener una reducción de costes laborales. Es lo que ocurre con el fenómeno de las empresas buzón, que se constituyen en determinados países miembros con el único objetivo de facilitar, mediante el desplazamiento de trabajadores, mano de obra barata en otros países cuyos costes habitualmente son más altos. El problema se complica cuando esta práctica cuenta con la laxitud o la pasividad en la aplicación de la norma por parte de las autoridades de los países en que estas empresas radican, que son quienes tienen la competencia para verificar el cumplimiento de los requisitos exigibles y la expedición de los documentos acreditativos. La sentencia que comentamos admite la posibilidad de que, en determinadas circunstancias, los tribunales de los países en que se desarrolle la prestación efectiva del trabajo puedan no tener en cuenta esos documentos obtenidos en el país de origen, y decidir conforme al resto del material probatorio disponible, cuando de este se desprenda la existencia de fraude en la obtención de los documentos bajo cuyo amparo se realizaron los desplazamientos.Parfois, les règles de l’Union Européenne qui visent à promouvoir la libre prestation de services et la libre circulation des travailleurs afin de favoriser l’interpénétration économique en évitant les complications administratives, telles que celles régissant la délivrance et l’utilisation des certificats E101 ou A1, sont utilisés frauduleusement pour obtenir une réduction des coûts de main-d'oeuvre. C'est ce qui se produit avec le phénomène des sociétés boîtes aux lettres, qui sont constituées dans certains pays membres dans le seul objectif de faciliter, par le déplacement de travailleurs, la maind'oeuvre bon marché dans d'autres pays, dont les coûts sont généralement plus élevés. Le problème se complique lorsque cette pratique présente le laxisme ou la passivité dans l’application de la règle par les autorités des pays dans lesquels ces sociétés sont implantées, qui ont la compétance pour vérifier le respect des exigences et la émission de documents justificatives. La sentence que nous commentons admet la possibilité que, dans certaines circonstances, les tribunaux des pays dans lesquels l’exécution effective du travail est développée ne prennent pas en compte les documents obtenus dans le pays d’origine et décident en fonction du reste des éléments de preuve disponibles, lorsque ces montrent l’existence d’une fraude dans l’obtention des documents sous la protection desquels les déplacements ont été effectués

The Identification and Economic Content of Ordered Choice Models with Stochastic Thresholds

This paper extends the widely used ordered choice model by introducing stochastic thresholds and interval-specific outcomes. The model can be interpreted as a generalization of the GAFT (MPH) framework for discrete duration data that jointly models durations and outcomes associated with different stopping times. We establish conditions for nonparametric identification. We interpret the ordered choice model as a special case of a general discrete choice model and as a special case of a dynamic discrete choice model.