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Identification of Potential Games and Demand Models for Bundles

  • Jeremy T. Fox
  • Natalia Lazzati

This paper studies nonparametric identification in binary choice games of complete information. We allow for correlated unobservables across players. We propose conditions under which the binary choice game is a so-called potential game and impose that the selected equilibrium maximizes its associated potential function. Our framework is formally equivalent to a multinomial choice demand model where a consumer can elect to purchase any bundle of products. We present a separate identification result for two-player games that does not rely on equilibrium selection.

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File URL: http://www.nber.org/papers/w18155.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 18155.

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Date of creation: Jun 2012
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Handle: RePEc:nbr:nberwo:18155
Note: IO LS TWP
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