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A dominance solvable global game with strategic substitutes

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  • Harrison, Rodrigo
  • Jara-Moroni, Pedro

Abstract

Global games emerged as an approach to equilibrium selection. For a general setting with supermodular payoffs, unique selection of equilibrium has been obtained through iterative elimination of strictly dominated strategies. For the case of global games with strategic substitutes, uniqueness of equilibrium has not been proved by iterative elimination of strictly dominated strategies, making the equilibrium less appealing. In this work we provide a condition for dominance solvability in a simple three-player binary-action global game with strategic substitutes. This opens an unexplored research agenda on the study of global games with strategic substitutes.

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  • Harrison, Rodrigo & Jara-Moroni, Pedro, 2015. "A dominance solvable global game with strategic substitutes," Journal of Mathematical Economics, Elsevier, vol. 57(C), pages 1-11.
  • Handle: RePEc:eee:mateco:v:57:y:2015:i:c:p:1-11
    DOI: 10.1016/j.jmateco.2015.01.001
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    References listed on IDEAS

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    1. Rodrigo J. Harrison, 2003. "Equilibrium Selection in Global Games with Strategic Substitutes," Game Theory and Information 0306003, University Library of Munich, Germany.
    2. Oury, Marion, 2013. "Noise-independent selection in multidimensional global games," Journal of Economic Theory, Elsevier, vol. 148(6), pages 2638-2665.
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    Cited by:

    1. Aviad Heifetz, 2019. "Robust multiplicity with (transfinitely) vanishing naiveté," International Journal of Game Theory, Springer;Game Theory Society, vol. 48(4), pages 1277-1296, December.

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