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How much can we identify from repeated games?

Author

Listed:
  • Jose Miguel Abito

    (University of Pennsylvania, Business Economics and Public Policy)

  • Cuicui Chen

    (State University of New York (SUNY) at Albany)

Abstract

We propose a strategy to identify structural parameters in infinitely repeated games without relying on equilibrium selection assumptions. We exploit the extreme points of the equilibrium payoff set to construct bounds on the frequencies of stage game actions, which then impose restrictions on the parameters of interest. To illustrate the identification strategy, we use an infinitely repeated Prisoners Dilemma to get bounds on a utility parameter and a common discount factor.

Suggested Citation

  • Jose Miguel Abito & Cuicui Chen, 2021. "How much can we identify from repeated games?," Economics Bulletin, AccessEcon, vol. 41(3), pages 1212-1222.
    • Handle: RePEc:ebl:ecbull:eb-20-01184
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    File URL: http://www.accessecon.com/Pubs/EB/2021/Volume41/EB-21-V41-I3-P102.pdf
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    References listed on IDEAS

    as
    1. Drew Fudenberg & Eric Maskin, 2008. "The Folk Theorem In Repeated Games With Discounting Or With Incomplete Information," World Scientific Book Chapters, in: Drew Fudenberg & David K Levine (ed.), A Long-Run Collaboration On Long-Run Games, chapter 11, pages 209-230, World Scientific Publishing Co. Pte. Ltd..
    2. Kenneth L. Judd & Sevin Yeltekin & James Conklin, 2003. "Computing Supergame Equilibria," Econometrica, Econometric Society, vol. 71(4), pages 1239-1254, July.
    3. Tobias Salz & Emanuel Vespa, 2020. "Estimating dynamic games of oligopolistic competition: an experimental investigation," RAND Journal of Economics, RAND Corporation, vol. 51(2), pages 447-469, June.
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    5. Patrick Bajari & C. Lanier Benkard & Jonathan Levin, 2007. "Estimating Dynamic Models of Imperfect Competition," Econometrica, Econometric Society, vol. 75(5), pages 1331-1370, September.
    6. Abreu, Dilip & Pearce, David & Stacchetti, Ennio, 1990. "Toward a Theory of Discounted Repeated Games with Imperfect Monitoring," Econometrica, Econometric Society, vol. 58(5), pages 1041-1063, September.
    7. Lee, Byung Soo & Stewart, Colin, 2016. "Identification of payoffs in repeated games," Games and Economic Behavior, Elsevier, vol. 99(C), pages 82-88.
    8. Manski, Charles F, 1990. "Nonparametric Bounds on Treatment Effects," American Economic Review, American Economic Association, vol. 80(2), pages 319-323, May.
    9. Dilip Abreu & Benjamin Brooks & Yuliy Sannikov, 2016. "A "Pencil Sharpening" Algorithm for Two Player Stochastic Games with Perfect Monitoring," Working Papers 78_2016, Princeton University, Department of Economics, Econometric Research Program..
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    Citations

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    Cited by:

    1. Abito, Jose Miguel & Knittel, Christopher R. & Metaxoglou, Konstantinos & Trindade, André, 2022. "The role of output reallocation and investment in coordinating environmental markets," International Journal of Industrial Organization, Elsevier, vol. 83(C).
    2. Abito, Jose Miguel & Chen, Cuicui, 2023. "A partial identification framework for dynamic games," International Journal of Industrial Organization, Elsevier, vol. 87(C).

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    Keywords

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    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

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