A Herding Perspective On Global Games And Multiplicity
AbstractRecently, it has been claimed that full-information multiple equilibria in games with strategic complementarities are not robust, because generalizing to allow slightly heterogeneous information implies uniqueness. This paper argues that this "global games" uniqueness result is itself not robust. If we generalize by allowing most agents to observe a few previous actions before choosing, instead of forcing players to move exactly simultaneously, then multiplicity of outcomes is restored. Only a small sample of observations is needed to make our herding equilibrium behave like a full-information sunspot equilibrium instead of a global games equilibrium.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Universidad Carlos III, Departamento de Economía in its series Economics Working Papers with number we032908.
Date of creation: May 2003
Date of revision:
Other versions of this item:
- Costain James S, 2007. "A Herding Perspective on Global Games and Multiplicity," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 7(1), pages 1-55, June.
- C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
- E00 - Macroeconomics and Monetary Economics - - General - - - General
This paper has been announced in the following NEP Reports:
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Antonio Cabrales & Rosemarie Nagel & Roc Armenter, 2007.
"Equilibrium selection through incomplete information in coordination games: an experimental study,"
Springer, vol. 10(3), pages 221-234, September.
- Rosemarie Nagel & Antonio Cabrales & Roc Armenter, 2002. "Equilibrium selection through incomplete information in coordination games: An experimental study," Economics Working Papers 601, Department of Economics and Business, Universitat Pompeu Fabra.
- Cheung, Yin-Wong & Friedman, Daniel, 2009.
"Speculative attacks: A laboratory study in continuous time,"
Journal of International Money and Finance,
Elsevier, vol. 28(6), pages 1064-1082, October.
- Yin-Wong Cheung & Daniel Friedman, 2008. "Speculative Attacks: A Laboratory Study in Continuous Time," CESifo Working Paper Series 2420, CESifo Group Munich.
- Yin-Wong Cheung & Daniel Friedman, 2009. "Speculative Attacks: A Laboratory Study in Continuous Time," Working Papers 072009, Hong Kong Institute for Monetary Research.
- John Duffy, 2009.
"Equilibrium Selection in Static and Dynamic Entry Games,"
376, University of Pittsburgh, Department of Economics, revised Dec 2011.
- Duffy, John & Ochs, Jack, 2012. "Equilibrium selection in static and dynamic entry games," Games and Economic Behavior, Elsevier, vol. 76(1), pages 97-116.
- Tai-kuang Ho & Ming-yen Wu, 2012. "Third-person Effect and Financial Contagion in the Context of a Global Game," Open Economies Review, Springer, vol. 23(5), pages 823-846, November.
- Schotter, Andrew & Yorulmazer, Tanju, 2009. "On the dynamics and severity of bank runs: An experimental study," Journal of Financial Intermediation, Elsevier, vol. 18(2), pages 217-241, April.
- Alfonso Rosa García & Hubert Janos Kiss, 2012.
Working Papers. Serie AD
2012-12, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- J. Daniel Aromí, 2013. "Pre-play Research in a Model of Bank Runs," Económica, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, vol. 59, pages 57-86, January-D.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.