arXiv 31 May 2019 · Econometrics · publishedJournal of Applied Econometrics (2021)
arXiv:1906.00003 · PDF · DOI · OpenAlex · Extracted main text
Structural models that admit multiple reduced forms, such as game-theoretic models with multiple equilibria, pose challenges in practice, especially when parameters are set-identified and the identified set is large. In such cases, researchers often choose to focus on a particular subset of equilibria for counterfactual analysis, but this choice can be hard to justify. This paper shows that some parameter values can be more "desirable" than others for counterfactual analysis, even if they are empirically equivalent given the data. In particular, within the identified set, some counterfactual predictions can exhibit more robustness than others, against local perturbations of the reduced forms (e.g. the equilibrium selection rule). We provide a representation of this subset which can be used to simplify the implementation. We illustrate our message using moment inequality models, and provide an empirical application based on a model with top-coded data.
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The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.
| Reference | Intensity | Mentions | Sections | Main text | |
|---|---|---|---|---|---|
| 1 | Ciliberto and Tamer (2009) Market Structure and Multiple Equilibria in Airline Markets | 0.644 | 4 | 1 | 100% |
| 2 | Romano, Shaikh, and Wolf (2014) A Practical Two-Step Method for Testing Moment Inequalities | 0.593 | 8 | 1 | 62% |
| 3 | Tamer (2003) Incomplete Simultaneous Discrete Response Model with Multiple Equilibria | 0.585 | 3 | 1 | 100% |
| 4 | Aguirregabiria and Nevo (2013) Recent Developments in Empirical IO: Dynamic Demand and Dynamic Games | 0.511 | 2 | 1 | 100% |
| 5 | Andrews and Shi (2013) Inference Based on Conditional Moment Inequalities | 0.511 | 2 | 1 | 100% |
| 6 | Bresnahan and Reiss (1991) Empirical Models of Discrete Games | 0.511 | 2 | 1 | 100% |
| 7 | Carneiro, Heckman, and Vytlacil (2011) Estimating Marginal Returns to Education | 0.511 | 2 | 1 | 100% |
| 8 | Heckman (2010) Causal Parameters and Policy Analysis in Economists: A Twentieth Century Restrospective | 0.511 | 2 | 1 | 100% |
| 9 | Jia (2008) What Happens When Wal-Mart Comes to Town: An Empirical Analysis of the Discount Retailing Industry | 0.511 | 2 | 1 | 100% |
| 10 | Oreopoulos and Petronijevic (2013) Making College Worth It: A Review of the Returns to Higher Education | 0.511 | 2 | 1 | 100% |
Showing the top 10 of 49 scored citations.