TY - JOUR
T1 - Equilibrium selection in global games with strategic complementarities
AU - Frankel, David M.
AU - Morris, Stephen
AU - Pauzner, Ady
PY - 2003/1/1
Y1 - 2003/1/1
N2 - 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.
AB - 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.
KW - Equilibrium selection
KW - Global games
KW - Strategic complementarities
KW - Supermodular games
UR - http://www.scopus.com/inward/record.url?scp=0038066576&partnerID=8YFLogxK
U2 - 10.1016/S0022-0531(02)00018-2
DO - 10.1016/S0022-0531(02)00018-2
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AN - SCOPUS:0038066576
SN - 0022-0531
VL - 108
SP - 1
EP - 44
JO - Journal of Economic Theory
JF - Journal of Economic Theory
IS - 1
ER -