arXiv 10 May 2022 · Econometrics · publishedJournal of Econometrics (2023) · 2 citations (OpenAlex)
arXiv:2205.04990 · PDF · DOI · OpenAlex · Extracted main text
Empirically, many strategic settings are characterized by stable outcomes in which players' decisions are publicly observed, yet no player takes the opportunity to deviate. To analyze such situations in the presence of incomplete information, we build an empirical framework by introducing a novel solution concept that we call Bayes stable equilibrium. Our framework allows the researcher to be agnostic about players' information and the equilibrium selection rule. The Bayes stable equilibrium identified set collapses to the complete information pure strategy Nash equilibrium identified set under strong assumptions on players' information. Furthermore, all else equal, it is weakly tighter than the Bayes correlated equilibrium identified set. We also propose computationally tractable approaches for estimation and inference. In an application, we study the strategic entry decisions of McDonald's and Burger King in the US. Our results highlight the identifying power of informational assumptions and show that the Bayes stable equilibrium identified set can be substantially tighter than the Bayes correlated equilibrium identified set. In a counterfactual experiment, we examine the impact of increasing access to healthy food on the market structures in Mississippi food deserts.
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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 | Yang, N (2020) Learning in retail entry | 1.000 | 5 | 3 | 100% |
| 2 | Bergemann, D. and S. Morris (2016) Bayes correlated equilibrium and the comparison of information structures in games | 0.965 | 10 | 3 | 90% |
| 3 | Syrgkanis, V., E. Tamer, and J. Ziani (2021) Inference on Auctions with Weak Assumptions on Information, Working Paper | 0.961 | 9 | 5 | 89% |
| 4 | Ciliberto, F. and E. Tamer (2009) Market Structure and Multiple Equilibria in Airline Markets | 0.956 | 8 | 5 | 88% |
| 5 | Magnolfi, L. and C. Roncoroni (forthcoming): Estimation of Discrete… | 0.894 | 14 | 7 | 71% |
| 6 | Liu, Q (2020) Stability and Bayesian Consistency in Two-Sided Markets | 0.874 | 6 | 2 | 100% |
| 7 | Horowitz, J. L. and S. Lee (forthcoming): Inference in a class of op… | 0.874 | 5 | 2 | 100% |
| 8 | Radner, R (1979) Rational expectations equilibrium: Generic existence and the information revealed by prices | 0.874 | 5 | 2 | 100% |
| 9 | Allcott, H., R. Diamond, J.-P. Dubé, J. Handbury, I. Rahkovsky, and… (2019) Food Deserts and the Causes of Nutritional Inequality | 0.811 | 4 | 2 | 100% |
| 10 | Kalai, E (2004) Large Robust Games | 0.737 | 3 | 2 | 100% |
Showing the top 10 of 73 scored citations.
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