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Statistical Inference in Games

Author

Listed:
  • Yuval Salant
  • Josh Cherry

Abstract

We consider statistical inference in games. Each player obtains a small random sample of other players' actions, uses statistical inference to estimate their actions, and chooses an optimal action based on the estimate. In a sampling equilibrium with statistical inference (SESI), the sample is drawn from the distribution of players' actions based on this process. We characterize the set of SESIs in large two‐action games, and compare their predictions to those of Nash equilibrium, and for different sample sizes and statistical inference procedures. We then study applications to competitive markets, markets with network effects, monopoly pricing, and search and matching markets.

Suggested Citation

  • Yuval Salant & Josh Cherry, 2020. "Statistical Inference in Games," Econometrica, Econometric Society, vol. 88(4), pages 1725-1752, July.
    • Handle: RePEc:wly:emetrp:v:88:y:2020:i:4:p:1725-1752
    DOI: 10.3982/ECTA17105
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Ganesh Iyer & T. Tony Ke, 2022. "Competitive Algorithmic Targeting and Model Selection," NBER Chapters, in: Economics of Artificial Intelligence, National Bureau of Economic Research, Inc.
    2. Mira Frick & Ryota Iijima & Yuhta Ishii, 2018. "Dispersed Behavior and Perceptions in Assortative Societies," Cowles Foundation Discussion Papers 2128R2, Cowles Foundation for Research in Economics, Yale University, revised Oct 2021.
    3. Sawa, Ryoji & Wu, Jiabin, 2023. "Statistical inference in evolutionary dynamics," Games and Economic Behavior, Elsevier, vol. 137(C), pages 294-316.
    4. Philippe Jehiel, 2022. "Analogy-Based Expectation Equilibrium and Related Concepts:Theory, Applications, and Beyond," Working Papers halshs-03735680, HAL.
    5. Srinivas Arigapudi & Yuval Heller & Amnon Schreiber, 2021. "Sampling dynamics and stable mixing in hawk-dove games," Papers 2107.08423, arXiv.org, revised Jun 2022.
    6. Mira Frick & Ryota Iijima & Yuhta Ishii, 2018. "Dispersed Behavior and Perceptions in Assortative Societies," Cowles Foundation Discussion Papers 2128R3, Cowles Foundation for Research in Economics, Yale University, revised Jun 2022.
    7. Srinivas Arigapudi & Yuval Heller & Amnon Schreiber, 2023. "Heterogeneous Noise and Stable Miscoordination," Papers 2305.10301, arXiv.org.
    8. Duarte Gonc{c}alves, 2022. "Sequential Sampling Equilibrium," Papers 2212.07725, arXiv.org, revised Nov 2023.
    9. Andreas Bjerre-Nielsen & Martin Benedikt Busch, 2022. "Statistical inference in social networks: how sampling bias and uncertainty shape decisions," Papers 2205.13046, arXiv.org.
    10. Arigapudi, Srinivas & Heller, Yuval & Milchtaich, Igal, 2021. "Instability of defection in the prisoner's dilemma under best experienced payoff dynamics," Journal of Economic Theory, Elsevier, vol. 197(C).
    11. Spiegler, Ran, 2021. "Modeling players with random “data access”," Journal of Economic Theory, Elsevier, vol. 198(C).
    12. Ryoji Sawa, 2022. "Statistical Inference in Evolutionary Dynamics," Working Papers e170, Tokyo Center for Economic Research.
    13. Förster, Manuel & Karos, Dominik, 2021. "From prejudice to racial profiling and back. A naἴve intuitive statistician's curse," Center for Mathematical Economics Working Papers 644, Center for Mathematical Economics, Bielefeld University.
    14. Sethi, Rajiv, 2021. "Stable sampling in repeated games," Journal of Economic Theory, Elsevier, vol. 197(C).
    15. Izquierdo, Segismundo S. & Izquierdo, Luis R., 2022. "Stability of strict equilibria in best experienced payoff dynamics: Simple formulas and applications," Journal of Economic Theory, Elsevier, vol. 206(C).
    16. Arigapudi, Srinivas & Heller, Yuval & Schreiber, Amnon, 2021. "Sampling Dynamics and Stable Mixing in Hawk–Dove Games," MPRA Paper 108819, University Library of Munich, Germany.

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