Structural Estimation of Sequential Games of Complete Information

Jason R. Blevins
Economic Inquiry 53 (2015), 791–811.

Payoff comparisons in a 2×2 sequential game of complete information

Versions and Availability:

Published version (DOI: 10.1111/ecin.12189)
Preprint version (November 1, 2014)
Ohio State University Working Paper 14–01, 2014: IDEAS | EconPapers

Abstract. In models of strategic interaction, there may be important order of entry effects if one player can credibly commit to an action (e.g., entry) before other players. If one estimates a simultaneous-move model, then the move-order effects will be confounded with the payoffs. This paper considers nonparametric identification and simulation-based estimation of sequential games of complete information. Relative to simultaneous-move games, these models avoid the problem of multiple equilibria and require fewer payoff normalizations. We apply the estimator in several Monte Carlo experiments and to study entry-order effects using data from the airline industry.

Keywords: static games, sequential games, identification, simulation-based estimation, airline industry.

JEL Classification: C57, C15, L93.

BibTeX Record:

@Article{blevins-2015-seqgame,
  author       = {Jason R. Blevins},
  title        = {Structural Estimation of Sequential Games
                  of Complete Information},
  year         = {2015},
  journal      = {Economic Inquiry},
  volume       = {53},
  pages        = {791--811}
}