The Peer Effect Of Macroeconomic Forecasting Industry In China's Finance Sector Using A Structural Estimation Approach

We investigate the strategic interactions among professional forecasters in the context of a static game with incomplete information in China's macroeconomic forecasting industry within the finance sector among the finance institutions.Professional forecasters attempt to be more precise than their peers when they face uncertainty about others' ability to forecast,given their own ability to forecast macro economy.We then estimate empirically the peer effects using the two-step method proposed by Bajari et al.(2012).The results identify pronounced peer effect among professional forecasters and specify the asymmetric peer effect exerted by the prominent professional forecasters.The results remain still valid through several robustness checks.The forecasting users need to address the peer effects due to competition among professional forecasters.