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Testing the quantal response hypothesis
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Melo, Emerson, Pogorelskiy, Kirill and Shum, Matthew (2018) Testing the quantal response hypothesis. International Economic Review, 60 (1). pp. 53-74. doi:10.1111/iere.12344 ISSN 0020-6598.
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Official URL: https://doi.org/10.1111/iere.12344
Abstract
We develop a non-parametric test for consistency of player behavior with the Quantal Re- sponse Equilibrium (QRE). The test exploits a characterization of the equilibrium choice prob- abilities 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 econo- metric 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: | Journal Article | ||||||||
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Subjects: | H Social Sciences > HB Economic Theory | ||||||||
Divisions: | Faculty of Social Sciences > Economics | ||||||||
Library of Congress Subject Headings (LCSH): | Game theory, Experimental economics, Economics -- Methodology | ||||||||
Journal or Publication Title: | International Economic Review | ||||||||
Publisher: | Wiley-Blackwell Publishing, Inc. | ||||||||
ISSN: | 0020-6598 | ||||||||
Official Date: | 9 October 2018 | ||||||||
Dates: |
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Volume: | 60 | ||||||||
Number: | 1 | ||||||||
Page Range: | pp. 53-74 | ||||||||
DOI: | 10.1111/iere.12344 | ||||||||
Status: | Peer Reviewed | ||||||||
Publication Status: | Published | ||||||||
Reuse Statement (publisher, data, author rights): | This is the peer reviewed version of the following article: Melo, E. , Pogorelskiy, K. and Shum, M. (2018), TESTING THE QUANTAL RESPONSE HYPOTHESIS. International Economic Review. Accepted Author Manuscript. doi:10.1111/iere.12344 which has been published in final form at https://doi.org/10.1111/iere.12344 This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions. | ||||||||
Access rights to Published version: | Restricted or Subscription Access | ||||||||
Date of first compliant deposit: | 23 March 2018 | ||||||||
Date of first compliant Open Access: | 19 August 2020 | ||||||||
Related URLs: | |||||||||
Open Access Version: |
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