Equilibrium Selection in Global Games with Strategic Substitutes

Rodrigo J. Harrison
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Rodrigo J. Harrison: UTFSM Chile and Georgetown University USA

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Abstract: This paper proves an equilibrium selection result for a class of games with strategic substitutes. Specifically, for a general class of binary action, N-player games, we prove that each such game has a unique equilibrium strategy profile. Using a global game approach first introduced by Carlsson and van Damme (1993), recent selection results apply to games with strategic complementarities. The present paper uses the same approach but removes the assumption of perfect symmetry in the dominance region of the players' payoffs. Instead we assume that players are ordered such that asymmetric dominance regions overlapped sequentially. This allow us to extend selection results to a class of games with strategic substitutes.

Keywords: Global Games; Equilibrium Selection; Strategic Substitutes. (search for similar items in EconPapers)
JEL-codes: C72 D82 H41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-gth and nep-pbe
Date: 2003-06-25
Note: Type of Document - Acrobat PDF; pages: 35
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpga:0306003

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