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Characterising equilibrium selection in global games with strategic complementarities

Christian Basteck (), Tijmen Daniëls and Frank Heinemann

Journal of Economic Theory, 2013, vol. 148, issue 6, 2620-2637

Abstract: Global games are widely used to predict behaviour in games with strategic complementarities and multiple equilibria. We establish two results on the global game selection. First, we show that, for any supermodular complete information game, the global game selection is independent of the payoff functions chosen for the gameʼs global game embedding. Second, we give a simple sufficient criterion to derive the selection and establish noise independence in many-action games by decomposing them into games with smaller action sets, to which we may often apply simple criteria. We also report in which small games noise independence may be established by counting the number of players or actions.

Keywords: Global games; Equilibrium selection; Strategic complementarities (search for similar items in EconPapers)
JEL-codes: C72 D82 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (24)

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Working Paper: Characterising Equilibrium Selection in Global Games with Strategic Complementarities (2010) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:148:y:2013:i:6:p:2620-2637

DOI: 10.1016/j.jet.2013.07.006

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