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Simultaneous Equations Models for Dummy Endogenous Variables: A Game Theoretic Formulation with an Application to Labor Force Participation

Bjorn, Paul A. and Vuong, Quang H. (1984) Simultaneous Equations Models for Dummy Endogenous Variables: A Game Theoretic Formulation with an Application to Labor Force Participation. Social Science Working Paper, 537. California Institute of Technology , Pasadena, CA. (Unpublished) http://resolver.caltech.edu/CaltechAUTHORS:20170919-140310752

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Abstract

A game theoretic approach for formulating simultaneous equations models for dummy endogenous variables is proposed and applied to a study of husband/wife labor force participation. A distinctive feature of our approach is that the simultaneous model is derived from optimizing behavior as an outcome of a game between two players. The equilibrium concept used is that of Nash. In addition, we show that the logical consistency conditions implied by usual simultaneous equation models with structural shift actually rules out simultaneity for the problem we consider; in our model, no logical consistency conditions are implied on the parameters.


Item Type:Report or Paper (Working Paper)
Additional Information:The early stage of this work was done while the second author was visiting the Universite des Sciences Sociales de Toulouse where he benefited from insightful discussions with J. J. Laffont, D. Lien and R. McKelvey provided helpful comments on the game theoretic part of this paper. Finally, we are greatly indebted to D. Grether and D. Rivers for valuable criticisms. Remaining errors are of course ours.
Group:Social Science Working Papers
Record Number:CaltechAUTHORS:20170919-140310752
Persistent URL:http://resolver.caltech.edu/CaltechAUTHORS:20170919-140310752
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:81575
Collection:CaltechAUTHORS
Deposited By: Jacquelyn Bussone
Deposited On:19 Sep 2017 21:17
Last Modified:21 Sep 2017 00:05

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