NONPARAMETRIC SHARP BOUNDS FOR PAYOFFS IN 2 × 2 GAMES

Marc Henry and Ismael Mourifiã‰
Authors registered in the RePEc Author Service: Ismael MOURIFIÉ ()

Working Papers from University of Toronto, Department of Economics

Abstract: We derive the empirical content of Nash equilibrium in 2×2 games of perfect information, including duopoly entry and coordination games. The derived bounds are nonparametric intersection bounds and are simple enough to lend themselves to existing inference methods. Implications of pure strategy Nash equilibrium and of exclusion restrictions are also derived. Without further assumptions, the hypothesis of Nash equilibrium play is not falsifiable. However, nontrivial bounds hold for the extent of potential monopoly advantage or free riding incentives.

Keywords: participation games; partial identification; intersection bounds (search for similar items in EconPapers)
JEL-codes: C25 C72 D43 (search for similar items in EconPapers)
Pages: Unknown pages
Date: 2013-10-01
New Economics Papers: this item is included in nep-gth and nep-hpe
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