We investigate the use of standard statistical models for quantal choi
ce in a game theoretic setting. Players choose strategies based on rel
ative expected utility and assume other players do so as well. We defi
ne a quantal response equilibrium (QRE) as a fixed point of this proce
ss and establish existence. For a logit specification of the error str
ucture, we show that as the error goes to zero, QRE approaches a subse
t of Nash equilibria and also implies a unique selection from the set
of Nash equilibria in generic games. We fit the model to a variety of
experimental data sets by using maximum likelihood estimation. (C) 199
5 Academic Press, Inc.