Estimating noncooperative and cooperative models of bargaining: an empirical comparison

Masanori Mitsutsune and Takanori Adachi

Empirical Economics, 2014, vol. 47, issue 2, 669-693

Abstract: This paper examines the issue of model selection in studies of strategic situations. In particular, we compare estimation results from a noncooperative formulation of government formulation à la (Baron and Ferejohn in Am Poli Sci Rev 87:34–47, 1989 ) with those from two alternative cooperative formulations (Nash in Econometrica 18:155–162, 1950 ; Shapley and Shubik in Am Poli Sci Rev 48:787–792, 1954 ). Although the estimates of the ministerial ranking are similar, statistical testing suggests that the noncooperative formulation is best fitted to the observed data among the alternative models. This result implies that modeling the noncooperative structure in bargaining situations is crucially important at the risk of possibly misspecifying the details of the game. Copyright Springer-Verlag Berlin Heidelberg 2014

Keywords: Model selection; Bargaining; Government formation; Structural estimation; C52; C71; C72; C78; H19 (search for similar items in EconPapers)
Date: 2014
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Working Paper: Estimating Noncooperative and Cooperative Models of Bargaining: An Empirical Comparison (2011)
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DOI: 10.1007/s00181-013-0755-9

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