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A priori knowledge usually enables us to decide that some coefficients must be zero in the particular equation, while they assume non-zero values in other equations of the system. We said that identification of an equation is based on variables not included (not appearing) in it. To be identifiable an equation must be independent of one or more important variables, which are included in other equations of the system. Such excluded variables, if operative during the sample period, will generate shifts in the other equations of the model, which will in turn identify the particular equation from which they are absent (i.e. in which they appear with zero coefficient).
Based on the a priori information a list can be prepared, which should be as complete as possible, of the factors which are relevant to the phenomenon being studied. The list can help us decide which of these factors would normally appear in each relationship. For example, assume that we want to study the demand for an agricultural product. The demand equation belongs to a system of equations describing the market mechanism.
A bidding increment is defined by the auctioneer as the least amount above the previous bid that a new bid must be in order to be adequate to the auctioneer. For example, if the in
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what is cooperative game model
Game 1 Color Coordination (with Delay) This game should be played twice, once without the delay tactic and once with it, to show the difference between out- comes in the s
A non-credible threat may be a threat created by a player in a very Sequential Game which might not be within the best interest for the player to hold out. The hope is that the thr
Players 1 and 2 are bargaining over how to split one dollar. Both players simultaneously name shares they would like to keep s 1 and s 2 . Furthermore, players' choices have to be
Scenario Two corporations should simultaneously elect a technology to use for his or her compatible merchandise. If the corporations adopt totally different standards, few sales
What do meant by Monopolistic competition? Monopolistic competition is a market structure wherein: 1. There are several competing producers into an industry, 2. Every pro
The normal kind may be a matrix illustration of a simultaneous game. For 2 players, one is that the "row" player, and also the different, the "column" player. Every rows or column
Problem: Consider a (simplified) game played between a pitcher (who chooses between throwing a fastball or a curve) and a batter (who chooses which pitch to expect). The batter ha
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