This paper investigates inference methods to introduce prior information in econometric modelling. The set up includes the nonlinear least squares and indirect inference estimators. The goal is to show that stochastic restrictions method estimates can be asymptotically more efficient than...

A new methodology is proposed to estimate theoretical prices of financial contin- gent claims whose values are dependent on some other underlying financial assets. In the literature, the preferred choice of estimator is usually maximum likelihood (ML). ML has strong asymptotic justification but...