Dynamic Discrete Choice
Degree Program: Master of Science in Economics
Course Type: Lecture, Master, 5 ECTS, Elective Course
Contact Person: Dr. Andreas Mense
Period: Winter Semester 2021/22
Pre-Requisites: The elective course is open to first and second year students in the Master of Science in Economics degree program. Pre-requisites: basic knowledge of econometrics (ordinary regression, logit/probit models, maximum likelihood principle).
Content: The lecture starts with an introduction to static discrete choice and random utility models, using the multinomial logit model as an example. Building on this foundation, we then move to dynamic discrete choice models, where agents have rational expectations about the future state of the world. Taking into account dynamic considerations of decision makers is important in many areas of economics and business studies. The lecture focuses on the so-called CCP estimator due to Arcidiacono and Miller (2011). The estimator is useful for dynamic decision models that can be estimated from short panels (if only several periods are observed), including data generated by randomized laboratory experiments. We then discuss an application of the estimator.
Lecture (Winter Semester 2021/22): Tuesdays from 16:45 to 18:15 in Room FG 1.036; lectures begin on Oct. 19, 2021.
Outline and Literature: Dynamic Discrete Choice – Syllabus 2021-22