Equilibrium Selection in Global Games with Strategic Complementarities

David Frankel, Stephen Morris and Ady Pauzner

ISU General Staff Papers from Iowa State University, Department of Economics

Abstract: We study games with strategic complementarities, arbitrary numbers of players and actions, and slightly noisy payoff signals. We prove limit uniqueness: as the signal noise vanishes, the game has a unique strategy profile that survives iterative dominance. This generalizes a result of Carlsson and van Damme (Econometrica 61 (1993) 989–1018) for two-player, two-action games. The surviving profile, however, may depend on fine details of the structure of the noise. We provide sufficient conditions on payoffs for there to be noise-independent selection.

Date: 2003-01-01
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Related works:
Journal Article: Equilibrium selection in global games with strategic complementarities (2003)
Working Paper: Equilibrium Selection in Global Games with Strategic Complementarities (2003)
Working Paper: Equilibrium Selection in Global Games with Strategic Complementarities (2001)
Working Paper: Equilibrium Selection in Global Games with Strategic Complementarities (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:isu:genstf:200301010800001098

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