Published September 19, 2017
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Simultaneous Equations Models for Dummy Endogenous Variables: A Game Theoretic Formulation with an Application to Labor Force Participation
- Creators
- Bjorn, Paul A.
- Vuong, Quang H.
Abstract
A game theoretic approach for formulating simultaneous equations models for dummy endogenous variables is proposed and applied to a study of husband/wife labor force participation. A distinctive feature of our approach is that the simultaneous model is derived from optimizing behavior as an outcome of a game between two players. The equilibrium concept used is that of Nash. In addition, we show that the logical consistency conditions implied by usual simultaneous equation models with structural shift actually rules out simultaneity for the problem we consider; in our model, no logical consistency conditions are implied on the parameters.
Additional Information
The early stage of this work was done while the second author was visiting the Universite des Sciences Sociales de Toulouse where he benefited from insightful discussions with J. J. Laffont, D. Lien and R. McKelvey provided helpful comments on the game theoretic part of this paper. Finally, we are greatly indebted to D. Grether and D. Rivers for valuable criticisms. Remaining errors are of course ours.Attached Files
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Additional details
- Eprint ID
- 81575
- Resolver ID
- CaltechAUTHORS:20170919-140310752
- Created
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2017-09-19Created from EPrint's datestamp field
- Updated
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2019-10-03Created from EPrint's last_modified field
- Caltech groups
- Social Science Working Papers
- Series Name
- Social Science Working Paper
- Series Volume or Issue Number
- 537