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Training Neural Networks Embedded in Dynamic Discrete Choice Models

Ecenur Oguz, Robert L. Bray

arXiv 9 Apr 2026 · Econometrics

arXiv:2604.09736 · PDF · DOI · OpenAlex · Extracted main text

Abstract

We develop the first general-purpose estimator for infinite-horizon dynamic discrete choice models whose estimation problem, after pre-computation, is unencumbered by large systems of linear equations -- either imposed as constraints, or embedded in the objective function. Our unnested fixed point (UFXP) and optimal unnested fixed point (OUFXP) estimators exploit a dual representation of Bellman's equation to separate the utility parameters from the dynamic programming fixed point. We establish the consistency and asymptotic normality of UFXP and OUFXP, as well as the efficiency of the latter. Our estimators enable researchers to model utility functions non-parametrically via flexible neural-network approximations.

Citation extraction

42
references
63
in-text mentions
42
distinct cited
3
self-citations
16,288
main-text words

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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
1Hotz, V. Joseph, Robert A. Miller (1993) Conditional Choice Probabilities and the Estimation of Dynamic Models0.81142100%
2Hotz, V. Joseph, Robert A. Miller, Seth Sanders, Jeffrey Smith (1994) A Simulation Estimator for Dynamic Models of Discrete Choice0.73732100%
3Rust, John (2000) Nested fixed point algorithm documentation manual, unpublished manuscript0.73732100%
4Bray, Robert L (2019) Strong convergence and dynamic economic models self0.6443267%
5Aguirregabiria, Victor, Pedro Mira (2010) Dynamic discrete choice structural models: A survey0.64422100%
6Dearing, Adam (2019) Pseudo-value functions and closed-form ccp estimation of dynamic discrete choice models, working paper0.64422100%
7Rust, John (1987) Optimal replacement of gmc bus engines: An empirical model of harold zurcher0.64422100%
8Arcidiacono, Peter, Robert A. Miller (2011) Conditional choice probability estimation of dynamic discrete choice models with unobserved heterogeneity0.5112250%
9Aguirregabiria, Victor, Pedro Mira (2002) Swapping the nested fixed point algorithm: A class of estimators for discrete markov decision models0.51121100%
10Aguirregabiria, Victor, Pedro Mira (2007) Sequential estimation of dynamic discrete games0.51121100%

Showing the top 10 of 42 scored citations.