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Global Games with Strategic Substitutes

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Abstract

This paper proves an equilibrium selection result for a class of games with strategic substitutes. Specifically, for a general class of binary action, N-player games, we prove that each such game has a unique equilibrium strategy profile. Using a global game approach first introduced by Carlsson and van Damme (1993), recent selection results apply to games with strategic complementarities. The present paper uses the same approach but removes the assumption of perfect symmetry in the dominance region of the players' payo.s. Instead we assume that players are ordered such that asymmetric dominance regions overlapped sequentially. This allow us to extend selection results to a class of games with strategic substitutes.

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Paper provided by Georgetown University, Department of Economics in its series Working Papers with number gueconwpa~03-03-06.

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Date of creation: 06 Mar 2003
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Handle: RePEc:geo:guwopa:gueconwpa~03-03-06

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Postal: Georgetown University Department of Economics Washington, DC 20057-1036
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Postal: Marcia Suss Administrative Officer Georgetown University Department of Economics Washington, DC 20057-1036
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Cited by:
  1. S. Rosenkranz & G.U. Weitzel, 2008. "Network Structure and Strategic Investments: An Experimental Analysis," Working Papers 08-24, Utrecht School of Economics.
  2. Rodrigo Harrison & Pedro Jara-Moroni, 2013. "A Dominance Solvable Global Game with Strategic Substitutes," Documentos de Trabajo 440, Instituto de Economia. Pontificia Universidad Católica de Chile..
  3. Eric Hoffmann, 2013. "Global Games Selection in Games with Strategic Substitutes or Complements," WORKING PAPERS SERIES IN THEORETICAL AND APPLIED ECONOMICS 201308, University of Kansas, Department of Economics.

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