Equilibrium Selection in Global Games with Strategic Complementarities

David Frankel, Stephen Morris and Ady Pauzner

No 1336, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

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 (1993) for two player, two action games. Te 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.

Keywords: Equilibrium Selection; Global Games; Strategic Complementarities; Supermodular Games (search for similar items in EconPapers)
JEL-codes: C72 D82 (search for similar items in EconPapers)
Pages: 62 pages
Date: 2001-11
New Economics Papers: this item is included in nep-ent, nep-gth and nep-net
Note: CFP 1075.
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Citations: View citations in EconPapers (29)

Published in Journal of Economic Theory (2003), 108(1): 1-44

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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 (2003)
Working Paper: Equilibrium Selection in Global Games with Strategic Complementarities (2000)
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