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Combinatorial Discrete Choice

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  • Fabian Eckert

    (Yale University)

  • Costas Arkolakis

    (Yale University)

Abstract

Combinatorial problems are prevalent in economics but the large dimensionality of potential solutions substantially limits the scope of their applications. We define and characterize a general class that we term combinatorial discrete choice problems and show that it incorporates existing problems in economics and engineering. We prove that intuitive sufficient conditions guarantee the existence of simple recursive procedures that can be used to identify the global maximum. We propose such an algorithm and show how it can be used to revisit problems whose computation was deemed infeasible before. We finally discuss results for a class of games characterized by these sufficient conditions.

Suggested Citation

  • Fabian Eckert & Costas Arkolakis, 2017. "Combinatorial Discrete Choice," 2017 Meeting Papers 249, Society for Economic Dynamics.
    • Handle: RePEc:red:sed017:249
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    References listed on IDEAS

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      • Ezra Oberfield & Esteban Rossi-Hansberg & Pierre-Daniel G. Sarte & Nicholas Trachter, 2020. "Plants in Space," Working Paper 20-05, Federal Reserve Bank of Richmond.
      • Ezra Oberfield & Esteban Rossi-Hansberg & Pierre-Daniel Sarte & Nicholas Trachter, 2020. "Plants in Space," NBER Working Papers 27303, National Bureau of Economic Research, Inc.
      • Rossi-Hansberg, Esteban & Oberfield, Ezra & Sarte, Pierre-Daniel & Trachter, Nicholas, 2020. "Plants in Space," CEPR Discussion Papers 14823, C.E.P.R. Discussion Papers.
    2. Emmanuel Dhyne & Ayumu Ken Kikkawa & Magne Mogstad & Felix Tintelnot, 2021. "Trade and Domestic Production Networks," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 88(2), pages 643-668.
    3. Michal Fabinger & E. Glen Weyl, 2018. "Functional Forms for Tractable Economic Models and the Cost Structure of International Trade," CIRJE F-Series CIRJE-F-1092, CIRJE, Faculty of Economics, University of Tokyo.
    4. Chen, Cheng & Sun, Chang & Zhang, Hongyong, 2022. "Learning and information transmission within multinational corporations," European Economic Review, Elsevier, vol. 143(C).
    5. Miguel Almunia & Pol Antràs & David Lopez-Rodriguez & Eduardo Morales, 2021. "Venting Out: Exports during a Domestic Slump," American Economic Review, American Economic Association, vol. 111(11), pages 3611-3662, November.

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