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Estimating Discrete Games

Marketing Science, Vol. 30, No. 6, pp. 997-1010, 2011

33 Pages Posted: 21 Mar 2011 Last revised: 31 Jan 2012

Paul B. Ellickson

University of Rochester - Simon Business School

Sanjog Misra

University of Chicago - Booth School of Business

Date Written: November 21, 2010

Abstract

This paper provides a critical review of the methods for estimating static discrete games and their relevance for quantitative marketing. We discuss the various modeling approaches, alternative assumptions, and relevant trade-offs involved in taking these empirical methods to data. We consider both games of complete and incomplete information, examine the primary methods for dealing with the coherency problems introduced by multiplicity of equilibria, and provide concrete examples from the literature. We illustrate the mechanics of estimation using a real world example and provide the computer code and dataset with which to replicate our results.

Keywords: discrete choice, game theory, strategic interaction

JEL Classification: M31, C14, C31, C35

Suggested Citation

Ellickson, Paul B. and Misra, Sanjog, Estimating Discrete Games (November 21, 2010). Marketing Science, Vol. 30, No. 6, pp. 997-1010, 2011. Available at SSRN: https://ssrn.com/abstract=1791686

Paul B. Ellickson (Contact Author)

University of Rochester - Simon Business School ( email )

Rochester, NY 14627
United States

Sanjog Misra

University of Chicago - Booth School of Business ( email )

5807 South Woodlawn Avenue
Chicago, IL 60637
United States

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