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In econometric theory two possibie situations of identifiability can arise: Equation under,consideration is identified or not identified:
1) Equation is under-identified-
If the structure of the equation is not unique or there is not sufficient linformationtto uniquely disfinguish the equation then the equation is under- identified.
2) Equation is identified
(a) Exactly identified: If there is sufficient information available to distinguish the equation then it is called just identified or exactly identified equation
(b) Over identified: If there is more than sufficient information regarding the equation then th$ equation is called over-identified.
Consider the Cournot duopoly model in which two firms, 1 and 2, simultaneously choose the quantities they will sell in the market, q1 and q2. The price each receives for each unity
GAME PLAYING IN CLASS There are several games that are appropriate for use on the first or second day of class. These games are simple but can be used to convey important poin
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consider the three player game in question 2 in assignment 1. Assume now that player 3 moves first. Players 1 and 2
Two animals are fighting over a prey. The prey is worth v to each animal. The cost of fighting is c1 for the first animal (player 1) and c2 for the second animal (player 2). If the
Limitations of game theory in finance
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Suppose that the incumbent monopolist, in the previous question, can decide (before anything else happens) to make an irreversible investment in extra Capacity (C), or Not (N). If
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