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Structural Estimation of Sequential Games of Complete Information

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  • Jason R. Blevins

    (Department of Economics, Ohio State University)

Abstract

In models of strategic interaction, there may be important order of entry effects if one player can credibly commit to an action (e.g., entry) before other players. If one estimates a simultaneous-move model, then the move-order effects will be confounded with the payoffs. This paper considers nonparametric identification and simulation-based estimation of sequential games of complete information. Relative to simultaneous-move games, these models avoid the problem of multiple equilibria and require fewer payoff normalizations. We apply the estimator in several Monte Carlo experiments and to study entry-order effects using data from the airline industry.

Suggested Citation

  • Jason R. Blevins, 2014. "Structural Estimation of Sequential Games of Complete Information," Working Papers 14-01, Ohio State University, Department of Economics.
  • Handle: RePEc:osu:osuewp:14-01
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    File URL: http://www.econ.ohio-state.edu/pdf/blevins/wp14-01.pdf
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    More about this item

    Keywords

    static games; sequential games; identification; simulation-based estimation; airline industry;
    All these keywords.

    JEL classification:

    • C57 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Econometrics of Games and Auctions
    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation

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