University of Michigan
238 Lorch Hall
611 Tappan Ave
Ann Arbor, MI 48109
NBER Working Papers and Publications
|June 2012||Identification of Potential Games and Demand Models for Bundles|
with Jeremy T. Fox: w18155
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.