Combinatorial Bootstrap Inference in Partially Identified Incomplete Structural Models

35 Pages Posted: 11 Feb 2011 Last revised: 7 Dec 2011

Marc Henry

Pennsylvania State University

Romuald Meango

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Maurice Queyranne

University of British Columbia (UBC) - Sauder School of Business

Date Written: December 7, 2011

Abstract

We propose a computationally feasible inference method in finite games of complete information. Galichon and Henry (2011) and Beresteanu, Molchanov and Molinari (2011) show that such models are equivalent to a collection of moment inequalities that increases exponentially with the number of discrete outcomes. We propose an equivalent characterization based on classical combinatorial optimization methods that alleviates this computational burden and allows the construction of confidence regions with an efficient combinatorial bootstrap procedure that runs in linear computing time. The method can also be applied to the empirical analysis of cooperative and noncooperative games, instrumental variable models of discrete choice and revealed preference analysis. We propose an application to the determinants of long term elderly care choices.

Keywords: Partial identification, confidence regions, combinatorial optimization

JEL Classification: C13, C72

Suggested Citation

Henry, Marc and Meango, Romuald and Queyranne, Maurice, Combinatorial Bootstrap Inference in Partially Identified Incomplete Structural Models (December 7, 2011). Available at SSRN: https://ssrn.com/abstract=1758743 or http://dx.doi.org/10.2139/ssrn.1758743

Marc Henry (Contact Author)

Pennsylvania State University ( email )

University Park
State College, PA 16802
United States

Romuald Meango

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Poschinger Str. 5
Munich, 01069
Germany

HOME PAGE: http://https://sites.google.com/site/romualdmeango/

Maurice Queyranne

University of British Columbia (UBC) - Sauder School of Business ( email )

2053 Main Mall
Vancouver, BC V6T 1Z2
Canada

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