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Identification of potential games and demand models for bundles

Author: Jeremy T Fox; Natalia Lazzati; National Bureau of Economic Research.
Publisher: Cambridge, Mass. : National Bureau of Economic Research, ©2012.
Series: Working paper series (National Bureau of Economic Research), no. 18155.
Edition/Format:   eBook : Document : EnglishView all editions and formats
Summary:
This paper studies nonparametric identification in binary choice games of complete information. We allow for correlated unobservables across players. We propose conditions under which the binary choice game is a so-called potential game and impose that the selected equilibrium maximizes its associated potential function. Our framework is formally equivalent to a multinomial choice demand model where a consumer can  Read more...
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Material Type: Document, Internet resource
Document Type: Internet Resource, Computer File
All Authors / Contributors: Jeremy T Fox; Natalia Lazzati; National Bureau of Economic Research.
OCLC Number: 795912931
Description: 1 online resource (35 pages).
Series Title: Working paper series (National Bureau of Economic Research), no. 18155.
Responsibility: Jeremy T. Fox, Natalia Lazzati.

Abstract:

This paper studies nonparametric identification in binary choice games of complete information. We allow for correlated unobservables across players. We propose conditions under which the binary choice game is a so-called potential game and impose that the selected equilibrium maximizes its associated potential function. Our framework is formally equivalent to a multinomial choice demand model where a consumer can elect to purchase any bundle of products. We present a separate identification result for two-player games that does not rely on equilibrium selection.

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