Duality in Dynamic Discrete Choice Models
Mar 1, 2016·,,·
1 min read
Khai Chiong
Alfred Galichon
Matt Shum
Abstract
This paper establishes a duality framework for dynamic discrete choice models, enabling new computational methods for solving large-scale dynamic optimization problems that arise in empirical industrial organization.
Type
Publication
Quantitative Economics, Volume 7, Issue 1, pages 83–115, March 2016
Duality in Dynamic Discrete Choice Models explores the relationship between choice probabilities and value functions in dynamic discrete choice models. By exploiting convex analysis, the authors derive a dual representation that simplifies computation and facilitates counterfactual analysis. The framework contributes to empirical work in industrial organization and dynamic decision-making.