Assignment 7: Estimating the Dynamic Duopoly Model

Write code to estimate the dynamic duopoly model using the club store data in Dearing and Blevins (2024). Some notes:

• You can feel free to directly use the demonstration code for solving the model given a set of parameters and a value of \(x\). To estimate the model you will need to do this for each value of \(x\) (i.e. the five values of pop in the data)
• Whatever estimation method you choose, be sure to explain clearly your approach, including any weights you might need to choose.
• Be sure to provide standard errors.

References

Dearing, Adam, and Jason R. Blevins. 2024. “Efficient and Convergent Sequential Pseudo-Likelihood Estimation of Dynamic Discrete Games.” Review of Economic Studies.