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Ambiguity and perceived coordination in a global game

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  • Laskar, Daniel

Abstract

In a global game, larger ambiguity is shown to decrease the amount of coordination each player perceives. Consequently, small uncertainty tends to select the Pareto dominated equilibrium of the game without uncertainty. Implications for models of financial crises are drawn.

Suggested Citation

  • Laskar, Daniel, 2014. "Ambiguity and perceived coordination in a global game," Economics Letters, Elsevier, vol. 122(2), pages 317-320.
    • Handle: RePEc:eee:ecolet:v:122:y:2014:i:2:p:317-320
    DOI: 10.1016/j.econlet.2013.12.018
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    References listed on IDEAS

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    1. Jean-Charles Rochet & Xavier Vives, 2004. "Coordination Failures and the Lender of Last Resort: Was Bagehot Right After All?," Journal of the European Economic Association, MIT Press, vol. 2(6), pages 1116-1147, December.
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    9. Cheli, Bruno & Della Posta, Pompeo, 2007. "Self-fulfilling currency attacks with biased signals," Journal of Policy Modeling, Elsevier, vol. 29(3), pages 381-396.
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    11. Schmeidler, David, 1989. "Subjective Probability and Expected Utility without Additivity," Econometrica, Econometric Society, vol. 57(3), pages 571-587, May.
    12. Daniel Laskar, 2012. "Ambiguity and Coordination in a Global. Game Model of Financial Crises," PSE Working Papers halshs-00749500, HAL.
    13. Daniel Laskar, 2012. "Ambiguity and Coordination in a Global. Game Model of Financial Crises," Working Papers halshs-00749500, HAL.
    14. Itzhak Gilboa, 2004. "Uncertainty in Economic Theory," Post-Print hal-00756317, HAL.
    15. Daniel Laskar, 2013. "Ambiguity, Pessimism, Optimism and Financial Crises in a Simple Global Game Model," Working Papers hal-00811923, HAL.
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    Cited by:

    1. Takashi Ui, 2023. "Strategic Ambiguity in Global Games," Papers 2303.12263, arXiv.org, revised Mar 2023.
    2. Takashi Ui, 2021. "Strategic Ambiguity in Global Games," Working Papers on Central Bank Communication 032, University of Tokyo, Graduate School of Economics.

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    More about this item

    Keywords

    Global game; Ambiguity; Coordination; Equilibrium selection; Financial crises;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • G01 - Financial Economics - - General - - - Financial Crises

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