Identification of Potential Games and Demand Models for Bundles

36 Pages Posted: 16 Jun 2012 Last revised: 9 Feb 2023

See all articles by Jeremy T. Fox

Jeremy T. Fox

University of Michigan at Ann Arbor

Natalia Lazzati

University of Arizona - Department of Economics

Date Written: June 2012

Abstract

This paper studies nonparametric identification in binary choice games of complete information. We allow for correlated unobservables across players. We propose conditions under which the binary choice game is a so-called potential game and impose that the selected equilibrium maximizes its associated potential function. Our framework is formally equivalent to a multinomial choice demand model where a consumer can elect to purchase any bundle of products. We present a separate identification result for two-player games that does not rely on equilibrium selection.

Suggested Citation

Fox, Jeremy T. and Lazzati, Natalia, Identification of Potential Games and Demand Models for Bundles (June 2012). NBER Working Paper No. w18155, Available at SSRN: https://ssrn.com/abstract=2085141

Jeremy T. Fox (Contact Author)

University of Michigan at Ann Arbor ( email )

500 S. State Street
Ann Arbor, MI 48109
United States

Natalia Lazzati

University of Arizona - Department of Economics ( email )

McClelland Hall
Tucson, AZ 85721-0108
United States

HOME PAGE: http://www.u.arizona.edu/~nlazzati/

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