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A Dominance Solvable Global Game with Strategic Substitutes

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  • Rodrigo Harrison
  • Pedro Jara-Moroni

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 study a simple three player binary action global game with strategic substitutes for which we provide a condition for dominance solvability. This opens an unexplored research agenda on the study of global games with strategic substitutes.

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  • 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..
  • Handle: RePEc:ioe:doctra:440
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