TY - JOUR
T1 - A dominance solvable global game with strategic substitutes
AU - Harrison, Rodrigo
AU - Jara-Moroni, Pedro
N1 - Funding Information:
We thank Stephen Morris for valuable conversation and insights and the audiences at the UECE Lisbon Meetings 2011, at the 2012 Paris Conference of the International Network on Expectational Coordination, the fourth World Congress of the Game Theory Society, the 2013 meeting of the Chilean Society of Economics, and at seminars at Universidad Católica de Chile and Universidad Adolfo Ibañez for their comments. Jara-Moroni thanks the financial support of CONICYT/FONDECYT/Regular 1140231 and the Millennium Institute “Complex Engineering Systems” (ICM: P-05-004-F, CONICYT: 522 FBO16).
Publisher Copyright:
© 2015 Elsevier B.V.
PY - 2015/3/1
Y1 - 2015/3/1
N2 - 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.
AB - 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.
KW - Equilibrium selection
KW - Global games
KW - Incomplete information
KW - Strategic substitutes
UR - http://www.scopus.com/inward/record.url?scp=84925851315&partnerID=8YFLogxK
U2 - 10.1016/j.jmateco.2015.01.001
DO - 10.1016/j.jmateco.2015.01.001
M3 - Article
AN - SCOPUS:84925851315
SN - 0304-4068
VL - 57
SP - 1
EP - 11
JO - Journal of Mathematical Economics
JF - Journal of Mathematical Economics
ER -