Nonparametric tests for strategic interaction effects with rationalizability

Andres Aradillas-Lopez

Economics Letters, 2019, vol. 181, issue C, 149-153

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.

Keywords: Nonparametric testing; Discrete games; Rationalizability (search for similar items in EconPapers)
JEL-codes: C14 C57 (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:181:y:2019:i:c:p:149-153

DOI: 10.1016/j.econlet.2019.05.018

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