EconPapers    
Economics at your fingertips  
 

Counterfactual prediction in complete information games: Point prediction under partial identification

Sung Jae Jun and Joris Pinkse

Journal of Econometrics, 2020, vol. 216, issue 2, 394-429

Abstract: We study the problem of counterfactual prediction in discrete decision games with complete information, pure strategies, and Nash equilibria: the presence of multiple equilibria poses unique challenges. We introduce multiple types of counterfactuals to establish sharp identified bounds for their prediction probabilities. We propose and compare various point prediction methods, namely midpoint prediction, an approach using a Dirichlet-based prior, a maximum entropy method, and minmax with an entropy constraint. On balance, we conclude that the maximum-entropy approach is the least of several evils. Our results have implications for counterfactual prediction in other models with partial identification.

Keywords: Complete information games; Counterfactual prediction; Partial identification; Maximum entropy; Dirichlet process; Minmax decisions (search for similar items in EconPapers)
JEL-codes: C01 C10 C57 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0304407619302258
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:econom:v:216:y:2020:i:2:p:394-429

DOI: 10.1016/j.jeconom.2019.02.009

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
Bibliographic data for series maintained by Haili He ().

 
Page updated 2020-06-20
Handle: RePEc:eee:econom:v:216:y:2020:i:2:p:394-429