On the Empirical Content of Quantal Response Equilibrium

Philip Haile, Ali Hortacsu and Grigory Kosenok

No 1432, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: The quantal response equilibrium (QRE) notion of McKelvey and Palfrey (1995) has recently attracted considerable attention, due largely to its widely documented ability to rationalize observed behavior in games played by experimental subjects. We show that this ability to fit the data, as typically measured in this literature, is uninformative. Without a priori distributional assumptions, a QRE can match any distribution of behavior by each player in any normal form game. We discuss approaches that might be taken to provide valid empirical evaluation of the QRE and discuss its potential value as an approximating empirical structure.

Keywords: Quantal response equilibrium; Testable restrictions; Comparative statics (search for similar items in EconPapers)
JEL-codes: C52 C7 C9 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2003-08
New Economics Papers: this item is included in nep-exp and nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Published in American Economic Review (2008), 98(1): 180-200

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Related works:
Journal Article: On the Empirical Content of Quantal Response Equilibrium (2008)
Working Paper: On the Empirical Content of Quantal Response Equilibrium (2006)
Working Paper: On the Empirical Content of Quantal Response Equilibrium (2006)
Working Paper: On the Empirical Content of Quantal Response Equilibrium (2004)
Working Paper: On the Empirical Content of Quantal Response Equilibrium (2003)
Working Paper: On the Empirical Content of Quantal Response Equilibrium (0820)
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