EX-Ante Information Heterogeneity in Global Games Models with Application to Team Production

Kim Seongkyun (), Myungkyu Shim and Song Doyoung ()
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Kim Seongkyun: School of Economics, Yonsei University; Korea Insurance Research Institute, 38 Gukjegeumyung-ro 6gil Youngdeungpo-gu, Seoul 07328, South Korea
Song Doyoung: Department of Economics, University of California, San Diego, 9500 Gilman Dr. La Jolla, CA 92093, USA

The B.E. Journal of Theoretical Economics, 2025, vol. 25, issue 1, 255-272

Abstract: This paper introduces ex ante information heterogeneity between players into an otherwise standard global game so that both a type with superior private information and that with inferior private information coexist. We first derive the condition under which a unique threshold equilibrium exists. We then show that less-informed (resp. more-informed) players are more likely to attack the regime than more-informed (resp. less-informed) players when (i) the fundamental is perceived to be weak (resp. strong) according to the public signal and (ii) the cost of attack is low (resp. high). We finally derive the implication of our finding on optimal information allocation problem in the context of team production.

Keywords: global games; unique equilibrium; information heterogeneity; comparative statics; optimal information (search for similar items in EconPapers)
JEL-codes: D80 D83 G14 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1515/bejte-2024-0022

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