Melo, Emerson and Pogorelskiy, Kirill and Shum, Matthew (2019) Testing the Quantal Response Hypothesis. International Economic Review, 60 (1). pp. 53-74. ISSN 0020-6598. doi:10.1111/iere.12344. https://resolver.caltech.edu/CaltechAUTHORS:20180820-102356418
![[img]](https://authors.library.caltech.edu/style/images/fileicons/application_pdf.png) |
PDF (Tables 6-7)
- Supplemental Material
See Usage Policy. 402kB |
Use this Persistent URL to link to this item: https://resolver.caltech.edu/CaltechAUTHORS:20180820-102356418
Abstract
We develop a non‐parametric test for consistency of player behavior 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; thereby QRE‐consistent choices satisfy 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 cannot reject individual‐level quantal response behavior for over half of the subjects.
| Item Type: | Article | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Related URLs: |
| |||||||||
| ORCID: |
| |||||||||
| Additional Information: | © 2018 by the Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association. Accepted manuscript online: 19 August 2018; Manuscript revised: 31 October 2017; Manuscript received: 06 April 2017. | |||||||||
| Issue or Number: | 1 | |||||||||
| DOI: | 10.1111/iere.12344 | |||||||||
| Record Number: | CaltechAUTHORS:20180820-102356418 | |||||||||
| Persistent URL: | https://resolver.caltech.edu/CaltechAUTHORS:20180820-102356418 | |||||||||
| Official Citation: | Melo, E. , Pogorelskiy, K. and Shum, M. (2019), TESTING THE QUANTAL RESPONSE HYPOTHESIS. International Economic Review, 60: 53-74. doi:10.1111/iere.12344 | |||||||||
| Usage Policy: | No commercial reproduction, distribution, display or performance rights in this work are provided. | |||||||||
| ID Code: | 88950 | |||||||||
| Collection: | CaltechAUTHORS | |||||||||
| Deposited By: | Tony Diaz | |||||||||
| Deposited On: | 20 Aug 2018 21:22 | |||||||||
| Last Modified: | 16 Nov 2021 00:31 |
Repository Staff Only: item control page
