Corpus ID: 85529105

# Empirical Equilibrium

@article{Velez2018EmpiricalE,
title={Empirical Equilibrium},
author={R. Velez and Alexander L. Brown},
journal={arXiv: Econometrics},
year={2018}
}
• Published 2018
• Economics, Mathematics
• arXiv: Econometrics
We study the foundations of empirical equilibrium, a refinement of Nash equilibrium that is based on a non-parametric characterization of empirical distributions of behavior in games (Velez and Brown,2020b arXiv:1907.12408). The refinement can be alternatively defined as those Nash equilibria that do not refute the regular QRE theory of Goeree, Holt, and Palfrey (2005). By contrast, some empirical equilibria may refute monotone additive randomly disturbed payoff models. As a by product, we show… Expand
3 Citations

#### Figures from this paper

Empirical bias of extreme-price auctions: analysis
• Economics
• 2019
We advance empirical equilibrium analysis (Velez and Brown, 2020, arXiv:1907.12408) of the winner-bid and loser-bid auctions for the dissolution of a partnership. We show, in a complete informationExpand
The paradox of monotone structural QRE
• Mathematics, Economics
• 2019
McKelvey and Palfrey (1995)'s monotone structural Quantal Response Equilibrium theory may be misspecified for the study of monotone behavior.

#### References

SHOWING 1-10 OF 71 REFERENCES
ON THE STRATEGIC STABILITY OF EQUILIBRIA
• Economics
• 1986
A basic problem in the theory of noncooperative games is the following: which Nash equilibria are strategically stable, i.e. self-enforcing, and does every game have a strategically stableExpand
Quantal Response Equilibria for Normal Form Games
• Mathematics
• 1995
We investigate the use of standard statistical models for quantal choice in a game theoretic setting. Players choose strategies based on relative expected utility and assume other players do so asExpand
M Equilibrium: A dual theory of beliefs and choices in games
• Economics, Computer Science
• ArXiv
• 2018
It is shown that colorable M equilibria are behaviorally stable, a concept that strengthens strategic stability, and set-valued and parameter-free M equilibrium envelopes various parametric models based on fixed-points, including QRE as well as a new and computationally simpler class of models called {\mu} Equilibrium. Expand
Implementation, Elimination of Weakly Dominated Strategies and Evolutionary Dynamics
• Mathematics
• 2000
This paper studies convergence and stability properties of Sjostrom's (1994) mechanism, under the assumption that boundedly rational players find their way to equilibrium using monotonic learningExpand
Regular Quantal Response Equilibrium
• Mathematics
• 2005
The structural Quantal Response Equilibrium (QRE) generalizes the Nash equilibrium by augmenting payoffs with random elements that are not removed in some limit. This approach has been widely usedExpand
On the Empirical Content of Quantal Response Equilibrium
• Economics, Chemistry
• 1988
The quantal response equilibrium (QRE) notion of McKelvey and Palfrey (1995) has recently attracted considerable attention, due in part to its widely documented ability to rationalize observedExpand
Quantal Response Methods for Equilibrium Selection in Normal Form Games
This paper describes a general framework for equilibrium selection by tracing the graph of the quantal response equilibrium (QRE) correspondence as a function of the variance of random disturbances.Expand
Nash Equilibrium and Welfare Optimality
If A is a set of social alternatives, a social choice rule (SCR) assigns a subset of A to each potential profile of individuals' preferences over A, where the subset is interpreted as the set ofExpand
Minimum-Effort Coordination Games: Stochastic Potential and Logit Equilibrium
• Economics, Computer Science
• Games Econ. Behav.
• 2001
This paper revisits the minimum-effort coordination game with a continuum of Pareto-ranked Nash equilibria with a logit probabilistic choice function and finds that logit equilibrium efforts decrease with increases in effort costs and the number of players, even though these parameters do not affect the Nash Equilibria. Expand
Nash Implementation Using Undominated Strategies
• Economics
• 1991
The authors study the problem of implementing social choice correspondences via Nash equilibrium in which no one uses a weakly dominated strategy. The main result is that if there are at least threeExpand