Estimating dynamic games of oligopolistic competition: an experimental investigation
We evaluate standard assumptions in the estimation of dynamic oligopoly models with laboratory data. Using an entry/exit game, we estimate structural parameters under the assumption that the data are generated by a Markov-perfect equilibrium and subsequently predict counterfactual behavior. If behav...
| المؤلفون الرئيسيون: | , |
|---|---|
| مؤلفون آخرون: | |
| التنسيق: | مقال |
| اللغة: | English |
| منشور في: |
Wiley
2021
|
| الوصول للمادة أونلاين: | https://hdl.handle.net/1721.1/130375 |
| _version_ | 1826213567581388800 |
|---|---|
| author | Salz, Tobias Vespa, Emanuel |
| author2 | Massachusetts Institute of Technology. Department of Economics |
| author_facet | Massachusetts Institute of Technology. Department of Economics Salz, Tobias Vespa, Emanuel |
| author_sort | Salz, Tobias |
| collection | MIT |
| description | We evaluate standard assumptions in the estimation of dynamic oligopoly models with laboratory data. Using an entry/exit game, we estimate structural parameters under the assumption that the data are generated by a Markov-perfect equilibrium and subsequently predict counterfactual behavior. If behavior was collusive, however, the assumption would be violated and one would mispredict counterfactuals. The laboratory allows us to compare predicted behavior to true counterfactuals implemented as treatments. Our main finding is that prediction errors due to collusion are modest in size. We also document a different deviation from equilibrium behavior (inertia) that can lead to large prediction errors. |
| first_indexed | 2024-09-23T15:51:18Z |
| format | Article |
| id | mit-1721.1/130375 |
| institution | Massachusetts Institute of Technology |
| language | English |
| last_indexed | 2024-09-23T15:51:18Z |
| publishDate | 2021 |
| publisher | Wiley |
| record_format | dspace |
| spelling | mit-1721.1/1303752022-10-02T04:36:26Z Estimating dynamic games of oligopolistic competition: an experimental investigation Salz, Tobias Vespa, Emanuel Massachusetts Institute of Technology. Department of Economics Sloan School of Management We evaluate standard assumptions in the estimation of dynamic oligopoly models with laboratory data. Using an entry/exit game, we estimate structural parameters under the assumption that the data are generated by a Markov-perfect equilibrium and subsequently predict counterfactual behavior. If behavior was collusive, however, the assumption would be violated and one would mispredict counterfactuals. The laboratory allows us to compare predicted behavior to true counterfactuals implemented as treatments. Our main finding is that prediction errors due to collusion are modest in size. We also document a different deviation from equilibrium behavior (inertia) that can lead to large prediction errors. 2021-04-05T20:03:33Z 2021-04-05T20:03:33Z 2020-06 2021-04-05T18:14:57Z Article http://purl.org/eprint/type/JournalArticle 1756-2171 https://hdl.handle.net/1721.1/130375 Salz, Tobias and Emanuel Vespa. "Estimating dynamic games of oligopolistic competition: an experimental investigation." RAND Journal of Economics 51, 2 (June 2020): 447-469. © 2020 The RAND Corporation. en http://dx.doi.org/10.1111/1756-2171.12321 RAND Journal of Economics Creative Commons Attribution-Noncommercial-Share Alike http://creativecommons.org/licenses/by-nc-sa/4.0/ application/pdf Wiley MIT web domain |
| spellingShingle | Salz, Tobias Vespa, Emanuel Estimating dynamic games of oligopolistic competition: an experimental investigation |
| title | Estimating dynamic games of oligopolistic competition: an experimental investigation |
| title_full | Estimating dynamic games of oligopolistic competition: an experimental investigation |
| title_fullStr | Estimating dynamic games of oligopolistic competition: an experimental investigation |
| title_full_unstemmed | Estimating dynamic games of oligopolistic competition: an experimental investigation |
| title_short | Estimating dynamic games of oligopolistic competition: an experimental investigation |
| title_sort | estimating dynamic games of oligopolistic competition an experimental investigation |
| url | https://hdl.handle.net/1721.1/130375 |
| work_keys_str_mv | AT salztobias estimatingdynamicgamesofoligopolisticcompetitionanexperimentalinvestigation AT vespaemanuel estimatingdynamicgamesofoligopolisticcompetitionanexperimentalinvestigation |