| David M. Frankel, Tel Aviv University Stephen Morris, Yale University Ady Pauzner, Tel Aviv University |
| Equilibrium Selection in Global Games with Strategic Complementarities |
| Session: C-12-5 Wednesday 16 August 2000 by Frankel, David M. |
| We study games with strategic complementarities, arbitrary numbers of players and actions, and slightly noisy payoff signals. We prove limit uniqueness: as the signal noise vanishes, the incomplete information game has a unique strategy profile that survives iterative dominance. This generalizes a result of Carlsson and van Damme for two player, two action games. The surviving profile, however, may depend on fine details of the structure of the noise. We provide sufficient conditions on payoffs for there to be noise-independent selection. |
| Submitted paper full-text in .pdf |