Re: st: Quantal Response Equilibrium with Stata

[Massimo Finocchiaro Castro <cmfino@unict.it>]

As promptly suggested (thanks Carlo!), I better add some more 
information regarding the Quantal Response Equilibrium application I am 
dealing with.

I run an experiment where participants, divided into pairs, allocates a 
given endowment between two possible investments. One player in each 
pair is a virtual player (the computer faced by the human player). This 
procedure is repeated 10 times by 94 human players.

To study the role of uncertainty on voluntary contributions to public 
goods. I run two different treatments. In the first treatment, human 
players know that the  virtual player will choose its contributions 
between two possible values with equal probability (50%-50%) but he does 
not know the chosen value until he has made his decision.

In the second treatment, the only difference with the previous treatment 
is that human players do not know the probability distribution of the 
computer's decisions. Uncertainty (or better ambiguity) is introduced 
through the Ellsberg's urn.

The Quantal Response Equilibrium should be able to tell me whether the 
deviations from the Nash Equilibrium are higher in the ambiguous 
treatment compared with the risky treatment (equal probability).

Hope this makes my problem a little clearer than before.

Massimo





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