Inference in a Synchronization Game with Social Interactions

Aureo de Paula

PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania

Abstract: This paper studies inference in a continuous-time game where an agent’s decision to quit an activity depends on the participation of other players. In equilibrium, similar actions can be explained not only by direct influences, but also by correlated factors. Our model can be seen as a simultaneous duration model with multiple decision makers and interdependent durations. We study the problem of determining existence and uniqueness of equilibrium stopping strategies in this setting. This paper provides results and conditions for the detection of these endogenous effects. First, we show that the presence of such effects is a necessary and sufficient condition for simultaneous exits. This allows us to set up a nonparametric test for the presence of such influences which is robust to multiple equilibria. Second, we provide conditions under which parameters in the game are identified. Finally, we apply the model to data on desertion in the Union Army during the American Civil War and find evidence of endogenous influences.

Keywords: duration models; social interactions; empirical games; optimal stopping (search for similar items in EconPapers)
JEL-codes: C10 C70 D70 (search for similar items in EconPapers)
Pages: 53 pages
Date: 2004-10-01, Revised 2007-05-01
New Economics Papers: this item is included in nep-ecm, nep-gth and nep-net
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Citations: View citations in EconPapers (9)

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Journal Article: Inference in a synchronization game with social interactions (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:pen:papers:07-017

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