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Identification of discrete choice models for bundles and binary games

  • Jeremy Fox

    (Institute for Fiscal Studies and University of Michigan)

  • Natalia Lazzati

    (Institute for Fiscal Studies)

We study nonparametric identification of single-agent discrete choice models for bundles and binary games of complete information. We provide conditions under which we can recover both the interaction effects and the distributions of potentially correlated unobservables across goods in single-agent models and across players in games. We establish similarities in identification between these two models. Strengthening our assumptions for games, we provide an equivalence relation between discrete choice models for bundles and binary games that relies on the theory of potential games. Potential games are particularly useful for games of three or more players.

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File URL: http://www.cemmap.ac.uk/wps/cwp041313.pdf
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Paper provided by Centre for Microdata Methods and Practice, Institute for Fiscal Studies in its series CeMMAP working papers with number CWP04/13.

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Date of creation: 27 Feb 2013
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Handle: RePEc:ifs:cemmap:04/13
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