IDEAS home Printed from
   My bibliography  Save this paper

Comment: Identification of a Simple Dynamic Discrete Game under Rationalizability


  • Victor Aguirregabiria


This paper studies the identification power of rationalizability in a simple dynamic discrete game model. The paper extends to dynamic games some of the results in Aradillas-Lopez and Tamer (2007). The most commonly used equilibrium concept in empirical applications of dynamic games is Markov Perfect Equilibrium (MPE). I study the identification of structural parameters when we replace the MPE assumption with weaker conditions such as rational behavior or rationalizability. I present identification results for a simple dynamic game of market entry-exit with two players. Under the assumption of level-2 rationalizability (i.e., players are rational and they know that they are rational), exclusion restrictions and large-support conditions on the exogenous explanatory variables are sufficient for point-identification of all the structural parameters. Though the model is fully parametric, the key identifying assumptions are nonparametric in nature and it seems that these identification results might be extended to a semiparametric version of the model.

Suggested Citation

  • Victor Aguirregabiria, 2007. "Comment: Identification of a Simple Dynamic Discrete Game under Rationalizability," Working Papers tecipa-299, University of Toronto, Department of Economics.
  • Handle: RePEc:tor:tecipa:tecipa-299

    Download full text from publisher

    File URL:
    File Function: Main Text
    Download Restriction: no

    References listed on IDEAS

    1. Elie Tamer, 2003. "Incomplete Simultaneous Discrete Response Model with Multiple Equilibria," Review of Economic Studies, Oxford University Press, vol. 70(1), pages 147-165.
    2. Philip A. Haile & Elie Tamer, 2003. "Inference with an Incomplete Model of English Auctions," Journal of Political Economy, University of Chicago Press, vol. 111(1), pages 1-51, February.
    3. Aradillas-Lopez, Andres & Tamer, Elie, 2008. "The Identification Power of Equilibrium in Simple Games," Journal of Business & Economic Statistics, American Statistical Association, vol. 26, pages 261-310.
    4. Robert Aumann & Adam Brandenburger, 2014. "Epistemic Conditions for Nash Equilibrium," World Scientific Book Chapters,in: The Language of Game Theory Putting Epistemics into the Mathematics of Games, chapter 5, pages 113-136 World Scientific Publishing Co. Pte. Ltd..
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Victor Aguirregabiria & Gustavo Vicentini, 2006. "Dynamic Spatial Competition Between Multi-Store Firms," Working Papers tecipa-253, University of Toronto, Department of Economics.
    2. repec:bla:jindec:v:64:y:2016:i:4:p:710-754 is not listed on IDEAS

    More about this item


    Identification; Empirical dynamic discrete games; Rational behavior; Rationalizability.;

    JEL classification:

    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tor:tecipa:tecipa-299. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (RePEc Maintainer). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.