Øystein Daljord, Chicago Booth School of Business

"Identifying the Discount Factor in Dynamic Discrete Choice Models"

By Professor Øystein Daljord


The identification of the discount factor in dynamic discrete models is important for counterfactual analysis, but hard. Existing approaches either take the discount factor to be known or rely on high level exclusion restrictions that are difficult to interpret and hard to satisfy in applications, in particular in industrial organization. We provide identification results under an exclusion restriction on primitive utility that is more directly useful to applied researchers. We also show that our and existing exclusion restrictions limit the choice and state transition probability data in different ways; that is, they give the model nontrivial and distinct empirical content. 

CCE organizes a weekly seminar, usually on Mondays from 13:00 to 14:15. These seminars are open to everyone. 
The seminar covers topics from all research fields in structural econometrics and computational economics including theoretical, empirical, methodological issues.