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Identification in discrete choice models with imperfect information

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  • Gualdani, Cristina
  • Sinha, Shruti

Abstract

We study identification of preferences in static single-agent discrete choice models where decision makers may be imperfectly informed about the state of the world. Leveraging the notion of one-player Bayes Correlated Equilibrium by Bergemann and Morris (2016), we provide a tractable characterisation of the sharp identified set. We develop a procedure to practically construct the sharp identified set following a sieve approach, and provide sharp bounds on counterfactual outcomes of interest. Using our methodology and data on the 2017 UK general election, we estimate a spatial voting model under weak assumptions on agents’ information about the returns to voting. Counterfactual exercises quantify the consequences of imperfect information on the well-being of voters and parties.

Suggested Citation

  • Gualdani, Cristina & Sinha, Shruti, 2024. "Identification in discrete choice models with imperfect information," Journal of Econometrics, Elsevier, vol. 244(1).
  • Handle: RePEc:eee:econom:v:244:y:2024:i:1:s0304407624001994
    DOI: 10.1016/j.jeconom.2024.105854
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    More about this item

    Keywords

    Discrete choice model; Bayesian persuasion; Bayes Correlated Equilibrium; Incomplete information; Partial identification; Moment inequalities; Spatial model of voting;
    All these keywords.

    JEL classification:

    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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