A global game with strategic substitutes and complements

Karp, Larry, Lee, In Ho and Mason, Robin (2007) A global game with strategic substitutes and complements. Games and Economic Behavior, 60 (1), 155-175. (doi:10.1016/j.geb.2006.10.003).

Abstract

We study a global game in which actions are strategic complements over some region and strategic substitutes over another region. An agent's payoff depends on a market fundamental and the actions of other agents. If the degree of congestion is sufficiently large, agents' strategies are non-monotonic in their signal about the market fundamental. In this case, a signal that makes them believe that the market fundamental is more favorable for an action may make them less likely to take the action, because of the risk of overcrowding

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