Statistical Backwards Induction: A Simple Method for Estimating Recursive Strategic Models

by: Muhammet A Bas, Curtis S Signorino, Robert W Walker

Political Analysis, Vol. 16, No. 1. (1 January 2008), pp. 21-40.

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Abstract

We present a simple method for estimating regressions based on recursive extensive-form games. Our procedure, which can be implemented in most standard statistical packages, involves sequentially estimating standard logits (or probits) in a manner analogous to backwards induction. We demonstrate that the technique produces consistent parameter estimates and show how to calculate consistent standard errors. To illustrate the method, we replicate Leblang's (2003) study of speculative attacks by financial markets and government responses to these attacks. 10.1093/pan/mpm029

@article{citeulike:2800555, abstract = {We present a simple method for estimating regressions based on recursive extensive-form games. Our procedure, which can be implemented in most standard statistical packages, involves sequentially estimating standard logits (or probits) in a manner analogous to backwards induction. We demonstrate that the technique produces consistent parameter estimates and show how to calculate consistent standard errors. To illustrate the method, we replicate Leblang's (2003) study of speculative attacks by financial markets and government responses to these attacks. 10.1093/pan/mpm029}, author = {Bas, Muhammet A. and Signorino, Curtis S. and Walker, Robert W. }, citeulike-article-id = {2800555}, doi = {10.1093/pan/mpm029}, journal = {Political Analysis}, keywords = {eitm, game-theory}, month = {January}, number = {1}, pages = {21--40}, posted-at = {2008-05-15 03:51:36}, priority = {2}, title = {Statistical Backwards Induction: A Simple Method for Estimating Recursive Strategic Models}, url = {http://dx.doi.org/10.1093/pan/mpm029}, volume = {16}, year = {2008} }

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TY - JOUR ID - citeulike:2800555 L3 - citeulike-article-id:2800555 TI - Statistical Backwards Induction: A Simple Method for Estimating Recursive Strategic Models JF - Political Analysis VL - 16 IS - 1 SP - 21 EP - 40 N2 - We present a simple method for estimating regressions based on recursive extensive-form games. Our procedure, which can be implemented in most standard statistical packages, involves sequentially estimating standard logits (or probits) in a manner analogous to backwards induction. We demonstrate that the technique produces consistent parameter estimates and show how to calculate consistent standard errors. To illustrate the method, we replicate Leblang's (2003) study of speculative attacks by financial markets and government responses to these attacks. 10.1093/pan/mpm029 KW - eitm KW - game-theory AU - Bas, Muhammet AU - Signorino, Curtis AU - Walker, Robert PY - 2008/01/01/ UR - http://dx.doi.org/10.1093/pan/mpm029 ER -

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