On the Empirical Content of Quantal Response Equilibrium
Philip A. Haile, Ali Hortaçsu and Grigory Kosenok
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| Article Citation |
Haile, Philip A., Ali Hortaçsu, and Grigory Kosenok. 2008. "On the Empirical Content of Quantal Response Equilibrium." American Economic Review, 98(1): 180–200.
DOI:10.1257/aer.98.1.180
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| Abstract |
The quantal response equilibrium (QRE) notion of Richard D. McKelvey and
Thomas R. Palfrey (1995) has recently attracted considerable attention, due
in part to its widely documented ability to rationalize observed behavior in
games played by experimental subjects. However, even with strong a priori
restrictions on unobservables, QRE imposes no falsifiable restrictions: it can
rationalize any distribution of behavior in any normal form game. After demonstrating
this, we discuss several approaches to testing QRE under additional
maintained assumptions. (JEL C72, D84)
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| Article Full-Text Access |
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| Authors |
Haile, Philip A. (Yale U)
Hortaçsu, Ali (U Chicago)
Kosenok, Grigory (New Economic School, Moscow)
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| JEL Classifications |
C72: Noncooperative Games
D84: Expectations; Speculations
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(pp. 5 - 37)