Relaxing the symmetry assumption in participation games: A specification test for cluster heterogeneity

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dc.contributor.authorKirman, A.
dc.contributor.authorLaisney, F.
dc.contributor.authorPezanis-Christou, P.
dc.contributor.editorDuffy, J.
dc.date.issued2023
dc.descriptionPublished online: 05 April 2023
dc.description.abstractWe propose a novel approach to check whether individual behaviour in binary-choice participation games is consistent with the restrictions imposed by symmetric models. This approach allows in particular an assessment of how much cluster-heterogeneity a symmetric model can tolerate to remain consistent with its behavioural restrictions. We assess our approach with data from market-entry experiments which we analyse through the lens of ‘Exploration versus Exploration’ (EvE, which is equivalent to Logit-QRE) or of Impulse Balance Equilibrium (IBE). We find that when the symmetry assumption is imposed, both models are typically rejected when assuming pooled data and IBE yields more data-consistent estimates than EvE, i.e., IBE’s estimates of session and pooled data are more consistent than those of EvE. When relaxing symmetry, EvE (IBE) is rejected for 17% (42%) of the time. Although both models support cluster-heterogeneity, IBE is much less likely to yield over-parametrised specifications and insignificant estimates so it outperforms EvE in accommodating a model-consistent cluster-heterogeneity. The use of regularisation procedures in the estimations partially addresses EvE’s shortcomings but leaves our overall conclusions unchanged.
dc.description.statementofresponsibilityAlan Kirman, François Laisney, Paul Pezanis, Christou
dc.identifier.citationExperimental Economics, 2023; 26(4):850-878
dc.identifier.doi10.1007/s10683-023-09797-8
dc.identifier.issn1386-4157
dc.identifier.issn1573-6938
dc.identifier.orcidPezanis-Christou, P. [0000-0001-6521-4139]
dc.identifier.urihttps://hdl.handle.net/2440/138179
dc.language.isoen
dc.publisherSpringer (part of Springer Nature)
dc.relation.granthttp://purl.org/au-research/grants/arc/DP140102949
dc.rights© The Author(s) 2023. Open Access This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article’s Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article’s Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/ by/4.0/.
dc.source.urihttps://doi.org/10.1007/s10683-023-09797-8
dc.subjectParticipation games; Exploration versus Exploitation; Logit-Quantal Response Equilibrium; Impulse Balance Equilibrium; Cluster-heterogeneity; Specification test; Regularized minimum distance estimation; Experiments
dc.titleRelaxing the symmetry assumption in participation games: A specification test for cluster heterogeneity
dc.typeJournal article
pubs.publication-statusPublished

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