EconPapers    
Economics at your fingertips  
 

A nonparametric test for cooperation in discrete games

Andres Aradillas-Lopez and Lidia Kosenkova

The Econometrics Journal, 2023, vol. 26, issue 2, 257-278

Abstract: SummaryWe propose a nonparametric test for cooperative behaviour among players in discrete, static games. Assuming that certain exchangeability conditions hold if we match observable characteristics across all players, we obtain testable implications for cooperative (coalitional) behaviour, which we define as occurring when players maximise an unknown joint objective function that is symmetric conditional on the matching. Cooperation implies the existence of a class of outcomes $\mathcal {Y}$ such that, conditional on the matching, the probability of observing an outcome $y\in \mathcal {Y}$ must be equal to the probability of observing any permutation of y. We present a nonparametric econometric test and we characterise its asymptotic properties. We apply our test to expansion/entry decisions of Lowe’s and Home Depot in the contiguous United States and we find that, while outcomes are consistent with noncooperative behaviour in larger markets, we fail to reject cooperation in smaller markets.

Keywords: Conditional moment restrictions; econometrics of games; matching; nonparametric tests (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1093/ectj/utad001 (application/pdf)
Access to full text is restricted to subscribers.

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:oup:emjrnl:v:26:y:2023:i:2:p:257-278.

Access Statistics for this article

The Econometrics Journal is currently edited by Jaap Abbring

More articles in The Econometrics Journal from Royal Economic Society Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press (joanna.bergh@oup.com).

 
Page updated 2025-03-19
Handle: RePEc:oup:emjrnl:v:26:y:2023:i:2:p:257-278.