 Stable outcomes and information in games: An empirical frameworkPaul S. Koh Journal of Econometrics, 2023, vol. 237, issue 1 Abstract: 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 and computationally tractable approaches for estimation and inference. Our framework allows the researcher to be agnostic about players’ information and the equilibrium selection rule. In an application, we study the strategic entry decisions of McDonald’s and Burger King in the US. While the Bayes stable equilibrium identified set is always (weakly) tighter than the Bayes correlated equilibrium identified set, our results show that the former can be substantially tighter in practice. In a counterfactual experiment, we examine the impact of increasing access to healthy food on the market structures in Mississippi food deserts. Keywords: Estimation of games; Bayes stable equilibrium; Informational robustness; Partial identification; Burger industry (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:econom:v:237:y:2023:i:1:s0304407623002154 DOI: 10.1016/j.jeconom.2023.105499 Access Statistics for this article Journal of Econometrics is currently edited by T. Amemiya, A. R. Gallant, J. F. Geweke, C. Hsiao and P. M. Robinson More articles in Journal of Econometrics from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.