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Testable Implications of Multiple Equilibria in Discrete Games with Correlated Types

Aureo de Paula, Xun Tang

arXiv 1 Dec 2020 · Econometrics · 1 citations (OpenAlex)

arXiv:2012.00787 · PDF · DOI · OpenAlex · Extracted main text

Abstract

We study testable implications of multiple equilibria in discrete games with incomplete information. Unlike de Paula and Tang (2012), we allow the players' private signals to be correlated. In static games, we leverage independence of private types across games whose equilibrium selection is correlated. In dynamic games with serially correlated discrete unobserved heterogeneity, our testable implication builds on the fact that the distribution of a sequence of choices and states are mixtures over equilibria and unobserved heterogeneity. The number of mixture components is a known function of the length of the sequence as well as the cardinality of equilibria and unobserved heterogeneity support. In both static and dynamic cases, these testable implications are implementable using existing statistical tools.

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29
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60
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Most heavily cited references

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.

ReferenceIntensityMentionsSectionsMain text
1Aguirregabiria, V. and P. Mira (2019) Identification of games of incomplete information with multiple equilibria and unobserved heterogeneity1.00093100%
2de Paula, A. and X. Tang (2012) Inference of signs of interaction effects in simultaneous games with incomplete information1.00053100%
3Luo, Y., P. Xiao, and R. Xiao (2019) Identification of Dynamic Games With Unobserved Heterogeneity and Multiple Equilibria: Global Fast Food Chains in China0.87462100%
4Kasahara, H. and K. Shimotsu (2014) Non-parametric identification and estimation of the number of components in multivariate mixtures0.81142100%
5Kleibergen, F. and R. Paap (2006) Generalized reduced rank tests using the singular value decomposition0.81142100%
6Aguirregabiria, V. and P. Mira (2007) Sequential estimation of dynamic discrete games0.64422100%
7Arcidiacono, P. and R. A. Miller (2011) Conditional choice probability estimation of dynamic discrete choice models with unobserved heterogeneity0.64422100%
8Bajari, P., H. Hong, J. Krainer, and D. Nekipelov (2010) Estimating static models of strategic interactions0.64422100%
9Pesendorfer, M. and P. Schmidt-Dengler (2008) Asymptotic least squares estimators for dynamic games0.64422100%
10Racine, J. S., J. Hart, and Q. Li (2006) Testing the significance of categorical predictor variables in nonparametric regression models0.64422100%

Showing the top 10 of 29 scored citations.