Nonparametric tests for strategic interaction effects with rationalizability

Andrés Aradillas-López

doi:10.1016/j.econlet.2019.05.018

Nonparametric tests for strategic interaction effects with rationalizability

Andrés Aradillas-López

Economics

Research output: Contribution to journal › Article › peer-review

2 Scopus citations

Abstract

We introduce the first nonparametric tests for the presence and the sign of strategic interaction effects in discrete 2 × 2 games of complete information under the assumption of rationalizable behavior, which includes Nash Equilibrium as a special case but allows for incorrect beliefs. Our tests assume the existence of an observable covariate with a positive stochastic relationship with the payoffs of a particular player.

Original language	English (US)
Pages (from-to)	149-153
Number of pages	5
Journal	Economics Letters
Volume	181
DOIs	https://doi.org/10.1016/j.econlet.2019.05.018
State	Published - Aug 2019

All Science Journal Classification (ASJC) codes

Finance
Economics and Econometrics

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10.1016/j.econlet.2019.05.018

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title = "Nonparametric tests for strategic interaction effects with rationalizability",

abstract = "We introduce the first nonparametric tests for the presence and the sign of strategic interaction effects in discrete 2 × 2 games of complete information under the assumption of rationalizable behavior, which includes Nash Equilibrium as a special case but allows for incorrect beliefs. Our tests assume the existence of an observable covariate with a positive stochastic relationship with the payoffs of a particular player.",

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AB - We introduce the first nonparametric tests for the presence and the sign of strategic interaction effects in discrete 2 × 2 games of complete information under the assumption of rationalizable behavior, which includes Nash Equilibrium as a special case but allows for incorrect beliefs. Our tests assume the existence of an observable covariate with a positive stochastic relationship with the payoffs of a particular player.

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U2 - 10.1016/j.econlet.2019.05.018

DO - 10.1016/j.econlet.2019.05.018

M3 - Article

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VL - 181

SP - 149

EP - 153

JO - Economics Letters

JF - Economics Letters

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Nonparametric tests for strategic interaction effects with rationalizability

Abstract

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