Discrete games with flexible information structures: An application to local grocery markets

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20 Scopus citations

Abstract

Game-theoretic models are frequently employed to study strategic interaction between agents. Empirical research has focused on estimating payoff functions while maintaining strong assumptions regarding the information structure of the game. I show how to relax informational assumptions to enhance the credibility of empirical analysis in discrete games. I apply the method to data on the entry and exit patterns of grocery stores. The model provides useful bounds on equilibrium outcomes. In addition, the empirical analysis indicates that more restrictive informational assumptions can generate qualitatively misleading counterfactual outcomes.

Original languageEnglish (US)
Pages (from-to)303-340
Number of pages38
JournalRAND Journal of Economics
Volume45
Issue number2
DOIs
StatePublished - Jan 1 2014

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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