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On Testability Of Complementarity In Models With Multiple Equilibria

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  • Taisuke Otsu
  • Yoshiyasu Rai

Abstract

This paper revisits testability of complementarity in economic models with multiple equilibria studied by Echenique and Komunjer (2009). We find that Echenique and Komunjer's (2009) testable implications on extreme quantiles can be implied by a weaker version of their tail condition without complementarity, and on the other hand, a slightly stronger version of complementarity implies their testable implications without the tail condition.

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File URL: http://sticerd.lse.ac.uk/dps/seminarpapers/em05022013.pdf
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Paper provided by Suntory and Toyota International Centres for Economics and Related Disciplines, LSE in its series STICERD - Econometrics Paper Series with number /2013/560.

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Date of creation: Feb 2013
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Handle: RePEc:cep:stiecm:/2013/560

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Web page: http://sticerd.lse.ac.uk/_new/publications/default.asp

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Keywords: Complementarity; Testability; Quantile.;

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  1. Federico Echenique & Ivana Komunjer, 2009. "Testing Models With Multiple Equilibria by Quantile Methods," Econometrica, Econometric Society, vol. 77(4), pages 1281-1297, 07.
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