Formal rules for identification, Game Theory

Identification may be established either by the examination of the specification of the structural model, or by the examination of the reduced form of the model.

Traditionally identification has been approached via the reduced form. In the sobsequent section we will examine both approaches. However, the reduced form approach is conceptually confusing and computationally more difficult than the structural model approach, because it requires the derivation of the reduced form first and then examination of the values of the determinant formed from some of the reduced form coefficients. The structural form approach is simpler and more useful.

In this unit we will only discuss the structural form approach of identification. In applying the identification rules we should ignore the constamt term if it is present in each equations, or, if it is present in some of the equations then we have to retain it and we need to treat it like separate variable. In this case we must include in the set of varijkdes a dummy variable (say X, ), which would always take on the value 1.

Posted Date: 4/4/2013 3:12:55 AM | Location : United States







Related Discussions:- Formal rules for identification, Assignment Help, Ask Question on Formal rules for identification, Get Answer, Expert's Help, Formal rules for identification Discussions

Write discussion on Formal rules for identification
Your posts are moderated
Related Questions
A pure strategy defines a selected move or action that a player can follow in each potential attainable state of affairs in a very game. Such moves might not be random, or drawn fr

A non-credible threat may be a threat created by a player in a very Sequential Game which might not be within the best interest for the player to hold out. The hope is that the thr

This version of Twenty-one is a card game played between a player and the dealer (the computer). The aim of the game is to accumulate a higher point total than the dealer but witho

Players 1 and 2 are bargaining over how to split one dollar. Both players simultaneously name shares they would like to keep s 1 and s 2 . Furthermore, players' choices have to be

A heuristic is an aid to learning, casually brought up as a rule of thumb. Formally, a heuristic may be a mechanism capable of altering its internal model of the surroundings in re

An auction during which just one item is on the market for sale. Procedures embody English, Dutch, and sealed bid auctions. When multiple units are sold in one auction, the auction

1. The town of Sunnydale, CA is inhabited by two vampires, Spike and Anya. Each night Spike and Anya independently hunt for food, which each one finds with probability 1/2 . Becaus

Scenario Two corporations should simultaneously elect a technology to use for his or her compatible merchandise. If the corporations adopt totally different standards, few sales

This is Case of Competitive Games. Player 2 L R Player 1 L (60,40) (70,30) R (65,35) (60,40) Are either have dominant st