# A Comment on "Estimating Dynamic Discrete Choice Models with Hyperbolic Discounting" by Hanming Fang and Yang Wang

## TL;DR

This paper critically examines Fang and Wang's claim of generic identification in dynamic discrete choice models with hyperbolic discounting, showing that their proof is flawed and that the claim does not hold universally.

## Contribution

It provides counterexamples and critiques Fang and Wang's Proposition 2, clarifying the limitations of their identification results and proposing alternative methods.

## Key findings

- Fang and Wang's Proposition 2 is invalid due to flawed proof.
- Counterexamples show models can be identified or not, contradicting the claim.
- The paper suggests alternative approaches to model identification.

## Abstract

The recent literature often cites Fang and Wang (2015) for analyzing the identification of time preferences in dynamic discrete choice under exclusion restrictions (e.g. Yao et al., 2012; Lee, 2013; Ching et al., 2013; Norets and Tang, 2014; Dub\'e et al., 2014; Gordon and Sun, 2015; Bajari et al., 2016; Chan, 2017; Gayle et al., 2018). Fang and Wang's Proposition 2 claims generic identification of a dynamic discrete choice model with hyperbolic discounting. This claim uses a definition of "generic" that does not preclude the possibility that a generically identified model is nowhere identified. To illustrate this point, we provide two simple examples of models that are generically identified in Fang and Wang's sense, but that are, respectively, everywhere and nowhere identified. We conclude that Proposition 2 is void: It has no implications for identification of the dynamic discrete choice model. We show that its proof is incorrect and incomplete and suggest alternative approaches to identification.