
Quantitative Economics
Journal Of The Econometric Society
Edited by: Stéphane Bonhomme • Print ISSN: 1759-7323 • Online ISSN: 1759-7331
Edited by: Stéphane Bonhomme • Print ISSN: 1759-7323 • Online ISSN: 1759-7331
Quantitative Economics: Jan, 2025, Volume 16, Issue 1
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.
Natalia Lazzati, John K.-H. Quah, and Koji Shirai
This supplemental appendix contains material not found within the manuscript.
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.