Behavioral and Descriptive Forms of Choice Models

Ariel Pakes

No 20022, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Empirical work on choice models, especially work on relatively new topics or data sets, often starts with descriptive, or what is often colloquially referred to as "reduced form", results. Our descriptive form formalizes this process. It is derived from the underlying behavioral model, has an interpretation in terms of fit, and can sometimes be used to quantify biases in agents' expectations. We consider estimators for the descriptive form of discrete choice models with (and without) interacting agents that take account of approximation errors as well as unobservable sources of endogeneity. We conclude with an investigation of the descriptive form of two period entry models.

JEL-codes: B4 C51 C57 (search for similar items in EconPapers)
Date: 2014-03
New Economics Papers: this item is included in nep-dcm, nep-ecm and nep-ger
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Published as Pakes, A. (2014), THE 2013 LAWRENCE R. KLEIN LECTURE: BEHAVIORAL AND DESCRIPTIVE FORMS OF CHOICE MODELS. International Economic Review, 55: 603-624. doi:10.1111/iere.12078

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