Work

On the Empirical Content of Quantal Response Equilibrium

Year: 2008

Type: article

Abstract: The quantal response equilibrium (QRE) notion of Richard D. McKelvey and Thomas R. Palfrey (1995) has recently attracted considerable attention, due in part to its widely documented ability to rationalize observed behavior in games played by experimental subjects. However, even with strong a priori restrictions on unobservables, QRE imposes no falsifiable restrictions: it can rationalize any distribution of behavior in any normal form game. After demonstrating this, we discuss several approaches to testing QRE under additional maintained assumptions. (JEL C72, D84)

Source: American Economic Review

DOI: 10.1257/aer.98.1.180

Authors: Philip A Haile, Ali Hortaçsu, Grigory Kosenok

Institutions: National Bureau of Economic Research, Yale University, University of Chicago, New Economic School

Language: English

Topic: Experimental Behavioral Economics Studies

Subfield: Safety Research

Field: Social Sciences

Domain: Social Sciences

Open Access status: green

Funders: National Science Foundation, Alfred P. Sloan Foundation

OpenAlex ID: W2113966094