Testing the quantal response hypothesis
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Publication:5224949
DOI10.1111/IERE.12344zbMATH Open1422.91177arXiv1604.06167OpenAlexW2895970146WikidataQ129399406 ScholiaQ129399406MaRDI QIDQ5224949FDOQ5224949
Authors: Emerson Melo, Kirill Pogorelskiy, Matthew Shum 
Publication date: 25 July 2019
Published in: International Economic Review (Search for Journal in Brave)
Abstract: This paper develops a non-parametric test for consistency of players' behavior in a series of games with the Quantal Response Equilibrium (QRE). The test exploits a characterization of the equilibrium choice probabilities in any structural QRE as the gradient of a convex function, which thus satisfies the cyclic monotonicity inequalities. Our testing procedure utilizes recent econometric results for moment inequality models. We assess our test using lab experimental data from a series of generalized matching pennies games. We reject the QRE hypothesis in the pooled data, but it cannot be rejected in the individual data for over half of the subjects.
Full work available at URL: https://arxiv.org/abs/1604.06167
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Cited In (9)
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