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Noise-independent selection in global games and monotone potential maximizer: A symmetric 3×3 example

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  • Honda, Jun
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    Abstract

    This note studies the relationship between the global game and the generalized potential game approaches. We provide a non-degenerate example of a symmetric 3×3 supermodular game that has no monotone potential maximizer (MP-maximizer). Since the global-game solution for symmetric 3×3 supermodular games is independent of the noise distribution, this implies that MP-maximizer is not a necessary condition for global-game noise-independent selection.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0304406811000590
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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Mathematical Economics.

    Volume (Year): 47 (2011)
    Issue (Month): 6 ()
    Pages: 663-669

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    Handle: RePEc:eee:mateco:v:47:y:2011:i:6:p:663-669

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    Web page: http://www.elsevier.com/locate/jmateco

    Related research

    Keywords: Equilibrium selection; Global games; Supermodular games; Potential games; Monotone potential;

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    1. Carlsson, H. & Damme, E.E.C. van, 1990. "Global games and equilibrium selection," Discussion Paper 1990-52, Tilburg University, Center for Economic Research.
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    7. Christian Basteck & Tijmen R. Daniëls & Frank Heinemann, 2010. "Characterising Equilibrium Selection in Global Games with Strategic Complementarities," SFB 649 Discussion Papers SFB649DP2010-008, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
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    11. Oyama, Daisuke & Takahashi, Satoru & Hofbauer, Josef, 2003. "Monotone Methods for Equilibrium Selection under Perfect Foresight Dynamics," MPRA Paper 6721, University Library of Munich, Germany.
    12. Hyun Song Shin & Stephen Morris, 2001. "Coordination Risk and the Price of Debt," FMG Discussion Papers dp373, Financial Markets Group.
    13. 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.
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    Cited by:
    1. 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.

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