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On the Empirical Content of Quantal Response Equilibrium

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Author Info
Philip A. Haile
Ali Hortaçsu
Grigory Kosenok

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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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File URL: http://hdl.handle.net/10.1257/aer.98.1.180
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Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 98 (2008)
Issue (Month): 1 (March)
Pages: 180-200
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Handle: RePEc:aea:aecrev:v:98:y:2008:i:1:p:180-200

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  30. Patrick Bajari & Ali Hortacsu, 2001. "Auction Models When Bidders Make Small Mistakes: Consequences for Theory and Estimation," Working Papers 01011, Stanford University, Department of Economics. [Downloadable!]
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  37. Angelique Augereau & Shane Greenstein & Marc Rysman, 2004. "Coordination vs. Differentiation in a Standards War: 56K Modems," NBER Working Papers 10334, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Marc Rysman, 2003. "Differentiation Across Standards and Adoption Failure in 56K Modems," Working Papers 03-12, NET Institute, revised Dec 2003. [Downloadable!]
  2. Eichberger, Jürgen & Kelsey, David, 2008. "Are the Treasures of Game Theory Ambiguous?," Sonderforschungsbereich 504 Publications 08-08, Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim. [Downloadable!]
    Other versions:
  3. Chris Starmer & Nicholas Bardsley, 2005. "Introduction," Experimental Economics, Springer, vol. 8(4), pages 295-299, December. [Downloadable!] (restricted)
  4. Glenn W Harrison, 2008. "Neuroeconomics: A Critical Reconsideration," Levine's Working Paper Archive 122247000000001915, UCLA Department of Economics. [Downloadable!]
  5. Philip A. Haile & Ali Hortacsu & Grigory Kosenok, 0820. "On the Empirical Content of Quantal Response Equilibrium," Cowles Foundation Discussion Papers 1432R, Cowles Foundation, Yale University, revised Jun 0820. [Downloadable!]
    Other versions:
  6. Tilman Becker & Michael Carter & Jörg Naeve, 2005. "Experts Playing the Traveler's Dilemma," Diskussionspapiere aus dem Institut für Volkswirtschaftslehre der Universität Hohenheim 252/2005, Department of Economics, University of Hohenheim, Germany. [Downloadable!]
  7. Angelique Augereau & Shane Greenstein & Marc Rysman, 2004. "Coordination vs. Differentiation in a Standards War: 56K Modems," NBER Working Papers 10334, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  8. Miguel A Costa-Gomes & Vincent P Crawford & Nagore Iriberri, 2008. "Comparing Models of Strategic Thinking in Van Huyck, Battalio, and Beil’s Coordination Games," Levine's Bibliography 122247000000002346, UCLA Department of Economics. [Downloadable!]
  9. Timothy N. Cason & Lata Gangadharan, 2004. "An Experimental Study of Compliance and Leverage in Auditing and Regulatory Enforcement," Department of Economics - Working Papers Series 918, The University of Melbourne. [Downloadable!]
    Other versions:
  10. Avi Goldfarb & Mo Xiao, 2008. "Who thinks about the competition? Managerial ability and strategic entry in US local telephone markets," Working Papers 08-21, NET Institute, revised Oct 2008. [Downloadable!]
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