Bio

Erhao Xie is a Principal Researcher in the Payments and Regulatory Oversight Department (PRO) at the Bank of Canada. His research examines how individuals and organizations make decisions in interconnected environments where one participant's actions can influence others. He develops quantitative methods and applies them to questions related to Canada's payment systems and banking industry. He holds a Ph.D. in Economics from the University of Toronto.

Research Field(s): Applied Econometrics Banking Econometric Theory Experimental Economics Industrial Organization Microeconometrics Payments Economics Retail Payments

Staff research

Non-Parametric Identification and Testing of Quantal Response Equilibrium

Staff working paper 2024-24 Johannes Hoelzemann, Ryan Webb, Erhao Xie
We show that the utility function and the error distribution are non-parametrically over-identified under Quantal Response Equilibrium (QRE). This leads to a simple test for QRE. We illustrate our method in a Monte Carlo exercise and a laboratory experiment.
Content Type(s): Staff research, Staff working papers JEL Code(s): C, C1, C14, C5, C57, C9, C92 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Economic models

Testing Collusion and Cooperation in Binary Choice Games

Staff working paper 2023-58 Erhao Xie
This paper studies the testable implication of players’ collusive or cooperative behaviour in a binary choice game with complete information. I illustrate the implementation of this test by revisiting the entry game between Walmart and Kmart.
Content Type(s): Staff research, Staff working papers JEL Code(s): C, C5, C57, L, L1, L13 Research Theme(s): Financial markets and funds management, Market structure, Models and tools, Econometric, statistical and computational methods

Nonparametric Identification of Incomplete Information Discrete Games with Non-equilibrium Behaviors

Staff working paper 2022-22 Erhao Xie
This paper jointly relaxes two assumptions in the literature that estimates games. These two assumptions are the parametric restriction on the model primitives and the restriction of equilibrium behaviors. Without imposing the above two assumptions, this paper identifies the primitives of the game.
Content Type(s): Staff research, Staff working papers JEL Code(s): C, C5, C57 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Economic models

Monetary Payoff and Utility Function in Adaptive Learning Models

Staff working paper 2019-50 Erhao Xie
When players repeatedly face an identical or similar game (e.g., coordination game, technology adoption game, or product choice game), they may learn through experience to perform better in the future. This learning behaviour has important economic implications.
Content Type(s): Staff research, Staff working papers JEL Code(s): C, C5, C57, C7, C72, C9, C92 Research Theme(s): Models and tools, Econometric, statistical and computational methods, Economic models

Inference in Games Without Nash Equilibrium: An Application to Restaurants’ Competition in Opening Hours

Staff working paper 2018-60 Erhao Xie
This paper relaxes the Bayesian Nash equilibrium (BNE) assumption commonly imposed in empirical discrete choice games with incomplete information. Instead of assuming that players have unbiased/correct expectations, my model treats a player’s belief about the behavior of other players as an unrestricted unknown function. I study the joint identification of belief and payoff functions.
Content Type(s): Staff research, Staff working papers JEL Code(s): C, C5, C57, L, L1, L13, L8, L85 Research Theme(s): Financial markets and funds management, Market structure, Models and tools, Econometric, statistical and computational methods

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Journal publications

Refereed journals

  • “Nonparametric Identification of Incomplete Information Discrete Games with Non-Equilibrium Behaviors,” Journal of Applied Econometrics, 41 (4), 2026.
  • “Testing Collusion and Cooperation in Binary Choice Games,” Econometric Reviews, 45 (6), 2026.
  • “Non-parametric Identification and Testing of Quantal Response Equilibrium” (with Johannes Hoelzemann and Ryan Webb), Games and Economic Behavior, 157, 2026.
  • “Inference in Games without Equilibrium Restriction: An Application to Restaurant Competition in Opening Hours,” Journal of Business & Economic Statistics, 40 (4), 2022.
  • “Empirical Properties and Identification of Adaptive Learning Models in Behavioral Game Theory,” Journal of Economic Behavior & Organization, 191, 2021.
  • “Identification of Non-Equilibrium Beliefs in Games of Incomplete Information Using Experimental Data” (with Victor Aguirregabiria), Journal of Econometric Methods, 10 (1), 2021.