Abstract
Global games emerged as an approach to equilibrium selection. For a general setting with supermodular payoffs, unique selection of equilibrium has been obtained through iterative elimination of strictly dominated strategies. For the case of global games with strategic substitutes, uniqueness of equilibrium has not been proved by iterative elimination of strictly dominated strategies, making the equilibrium less appealing. In this work we provide a condition for dominance solvability in a simple three-player binary-action global game with strategic substitutes. This opens an unexplored research agenda on the study of global games with strategic substitutes.
| Original language | English |
|---|---|
| Pages (from-to) | 1-11 |
| Number of pages | 11 |
| Journal | Journal of Mathematical Economics |
| Volume | 57 |
| DOIs | |
| State | Published - 1 Mar 2015 |
| Externally published | Yes |
Keywords
- Equilibrium selection
- Global games
- Incomplete information
- Strategic substitutes