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A global game with strategic substitutes and complements

A global game with strategic substitutes and complements
A global game with strategic substitutes and complements
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
global games, congestion, coordination
0899-8256
155-175
Karp, Larry
c0e2efad-f4e6-4fb9-9630-aaa8cf37b72e
Lee, In Ho
f9fa5dda-198f-4857-8fe5-82023a389d3c
Mason, Robin
c989f0e0-de54-495d-aeaf-75b42d62cb61
Karp, Larry
c0e2efad-f4e6-4fb9-9630-aaa8cf37b72e
Lee, In Ho
f9fa5dda-198f-4857-8fe5-82023a389d3c
Mason, Robin
c989f0e0-de54-495d-aeaf-75b42d62cb61

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).

Record type: Article

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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More information

Published date: July 2007
Keywords: global games, congestion, coordination
Organisations: Economics

Identifiers

Local EPrints ID: 47657
URI: http://eprints.soton.ac.uk/id/eprint/47657
ISSN: 0899-8256
PURE UUID: 2d873f70-4a6b-4b6d-88cb-aa8660d43d32

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Date deposited: 07 Aug 2007
Last modified: 15 Mar 2024 09:35

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Contributors

Author: Larry Karp
Author: In Ho Lee
Author: Robin Mason

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