Quantitative Economics

Journal Of The Econometric Society

Edited by: Stéphane Bonhomme • Print ISSN: 1759-7323 • Online ISSN: 1759-7331

Quantitative Economics: Jan, 2025, Volume 16, Issue 1

An Ordinal Approach to the Empirical Analysis of Games with Monotone Best Responses

https://doi.org/10.3982/QE2192
p. 235-266

Natalia Lazzati|John K.‐H. Quah|Koji Shirai

We develop a nonparametric and ordinal approach for testing pure strategy Nash equilibrium play in games with monotone best responses, such as those with strategic complements/substitutes. The approach makes minimal assumptions on unobserved heterogeneity, requires no parametric assumptions on payoff functions, and no restriction on equilibrium selection from multiple equilibria. The approach can also be extended in order to make inferences and predictions. Both model‐testing and inference can be implemented by a tractable computation procedure based on column generation. To illustrate how our approach works, we include an application to an IO entry game.


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Supplemental Material

Supplement to "An Ordinal Approach to the Empirical Analysis of Games with Monotone Best Responses"

Natalia Lazzati, John K.-H. Quah, and Koji Shirai

This supplemental appendix contains material not found within the manuscript.

Supplement to "An Ordinal Approach to the Empirical Analysis of Games with Monotone Best Responses"

Natalia Lazzati, John K.-H. Quah, and Koji Shirai

The replication package for this paper is available at https://doi.org/10.5281/zenodo.13322699. The Journal checked the data and codes included in the package for their ability to reproduce the results in the paper and approved online appendices.

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