NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Identification of Potential Games and Demand Models for Bundles

Jeremy T. Fox, Natalia Lazzati

NBER Working Paper No. 18155
Issued in June 2012
NBER Program(s):   IO   LS   TWP

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.

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Document Object Identifier (DOI): 10.3386/w18155

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