Strategic Binary Choice Models with Partial Observability

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2018-10-01
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Nieman, Mark
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Political Science
The Department of Political Science has been a separate department in the College of Liberal Arts and Sciences (formerly the College of Sciences and Humanities) since 1969 and offers an undergraduate degree (B.A.) in political science, a graduate degree (M.A.) in political science, a joint J.D./M.A. degree with Drake University, an interdisciplinary degree in cyber security, and a graduate Certificate of Public Management (CPM). In addition, it provides an array of service courses for students in other majors and other colleges to satisfy general education requirements in the area of the social sciences.
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Abstract

Strategic interactions among rational, self-interested actors are commonly theorized in the behavioral, economic, and social sciences. The theorized strategic processes have traditionally been modeled with multi-stage structural estimators, which improve parameter estimates at one stage by using the information from other stages. Multi-stage approaches, however, impose rather strict demands on data availability: data must be available for the actions of each strategic actor at every stage of the interaction. Observational data are not always structured in a manner that is conducive to these approaches. Moreover, the theorized strategic process implies that these data are missing not at random. In this paper, I derive a strategic logistic regression model with partial observability that probabilistically estimates unobserved actor choices related to earlier stages of strategic interactions. I compare the estimator to traditional logit and split-population logit estimators using Monte Carlo simulations and a substantive example of the strategic firm-regulator interaction associated with pollution and environmental sanctions.

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This article is published as Nieman, M.D., Strategic Binary Choice Models with Partial Observability. Statistics Sinica. October 2018, 28(4); 2089-2105. doi: 10.5705/ss.202016.0294. Posted with permission.

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Mon Jan 01 00:00:00 UTC 2018
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