Model Restrictiveness in Functional and Structural Settings

Drew Fudenberg, Wayne Yuan Gao and Zhiheng You

Papers from arXiv.org

Abstract: We extend the restrictiveness measure of Fudenberg, Gao & Liang (2026) to functional and structural econometric settings using Gaussian process priors. We find that models evaluated over continuum domains appear more restrictive than when evaluated over finite sets of observations. We also extend the restrictiveness framework to structural models with endogeneity, instrumental variables, multiple equilibria, and nonparametric nuisance components. We explain why the choice of discrepancy function is a substantive modeling decision, and why the Rademacher complexity and GMM criterion functions are unsuitable as discrepancies. We further show that restrictiveness equals the normalized limit of the noise-free average-case learning curve. In applications to preferences under risk, and multinomial choice under exogenous and endogenous settings, we find that the same models exhibit uniformly higher restrictiveness when evaluated over continuum domains than based on their predictions on finite sets, and that moment restrictions from endogeneity substantially increase restrictiveness and alter model rankings.

Date: 2026-02, Revised 2026-03
New Economics Papers: this item is included in nep-dcm and nep-ecm
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://arxiv.org/pdf/2602.07688 Latest version (application/pdf)

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:arx:papers:2602.07688

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().