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Monotone and local potential maximizers in symmetric 3x3 supermodular games

Author

Listed:
  • Daisuke Oyama

    (Graduate School of Economics, Hitotsubashi University)

  • Satoru Takahashi

    (Department of Economics, Princeton University)

Abstract

Generalized notions of potential maximizer, monotone potential maximizer (MP-maximizer) and local potential maximizer (LP-maximizer), are studied. It is known that 2x2 coordination games generically have a potential maximizer, while symmetric 4x4 supermodular games may have no MP- or LP-maximizer. This note considers the case inbetween, namely the class of (generic) symmetric 3x3 supermodular coordination games. This class of games are shown to always have a unique MP-maximizer, and its complete characterization is given. A nondegenerate example demonstrates that own-action quasiconcave supermodular games may have more than one LP-maximizers.

Suggested Citation

  • Daisuke Oyama & Satoru Takahashi, 2009. "Monotone and local potential maximizers in symmetric 3x3 supermodular games," Economics Bulletin, AccessEcon, vol. 29(3), pages 2123-2135.
    • Handle: RePEc:ebl:ecbull:eb-09-00406
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    File URL: http://www.accessecon.com/Pubs/EB/2009/Volume29/EB-09-V29-I3-P61.pdf
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    References listed on IDEAS

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    Cited by:

    1. Honda, Jun, 2011. "Noise-independent selection in global games and monotone potential maximizer: A symmetric 3×3 example," Journal of Mathematical Economics, Elsevier, vol. 47(6), pages 663-669.
    2. Oyama, Daisuke & Takahashi, Satoru, 2011. "On the relationship between robustness to incomplete information and noise-independent selection in global games," Journal of Mathematical Economics, Elsevier, vol. 47(6), pages 683-688.
    3. Oyama, Daisuke & Takahashi, Satoru, 2015. "Contagion and uninvadability in local interaction games: The bilingual game and general supermodular games," Journal of Economic Theory, Elsevier, vol. 157(C), pages 100-127.
    4. Basteck, Christian & Daniëls, Tijmen R., 2011. "Every symmetric 3×3 global game of strategic complementarities has noise-independent selection," Journal of Mathematical Economics, Elsevier, vol. 47(6), pages 749-754.

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    More about this item

    Keywords

    equilibrium selection; supermodular game; monotone potential; MP-maximizer; local potential; LP-maximizer;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory

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