CIRJE-F-943 | "Bayesian Estimation of Entry Games with Multiple Players and Multiple Equilibria" |
Author Name | Onishi, Yuko and Yasuhiro Omori |
Date | October 2014 |
Full Paper | PDF file |
Remarks | Subsequently published as Yuko Onishi and Yasuhiro Omori (2016), "Bayesian estimation of entry games with multiple players and multiple equilibria," Japanese Economic Review, 67-4, 418–440. December 2016. DOI: 10.1111/jere.12108. |
Abstract |
Entry game models are often used to study the nature of firms’ profit and the nature of competition among firms in empirical studies. However, when there are multiple players in an oligopoly market, resulting multiple equilibria have made it difficult in previous studies to estimate the payo↵ functions of players in complete information, static and discrete games without
using unreasonable assumptions. To overcome this difficulty, this paper proposes a practical estimation method for an entry game with three players using a Bayesian approach. Some mild
assumptions are imposed on the payoff function, and the average competitive effect is used to
capture the entry effect of the number of firms. |