Nonparametric tests for strategic interaction effects with rationalizability

Research output: Contribution to journalArticle

Abstract

We introduce the first nonparametric tests for the presence and the sign of strategic interaction effects in discrete 2 × 2 games of complete information under the assumption of rationalizable behavior, which includes Nash Equilibrium as a special case but allows for incorrect beliefs. Our tests assume the existence of an observable covariate with a positive stochastic relationship with the payoffs of a particular player.

Original languageEnglish (US)
Pages (from-to)149-153
Number of pages5
JournalEconomics Letters
Volume181
DOIs
StatePublished - Aug 1 2019

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Complete information
Rationalizability
Nonparametric test
Nash equilibrium
Interaction effects
Strategic interaction
Covariates

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics

Cite this

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Nonparametric tests for strategic interaction effects with rationalizability. / Aradillas-Lopez, Andres.

In: Economics Letters, Vol. 181, 01.08.2019, p. 149-153.

Research output: Contribution to journalArticle

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