Rationalizability, Learning, and Equilibrium in Games with Strategic Complementarities

Milgrom, Paul; Roberts, John L.

doi:10.2307/2938316

Cited by 1,470 publications

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“…This paper also contributes to a large literature on games with strategy complementarities, also known as supermodular games. These games were first studied as a class by Topkis [28] and are further analyzed by Vives [30] and Milgrom and Roberts [19]. The connection between our findings and existing results on supermodular games is discussed in the conclusion.…”

Section: Introductionmentioning

confidence: 58%

“…In case (3), noise-independent selection holds even without own-action quasiconcavity. 4 See Milgrom and Roberts [19] for a survey of applications. 5 Morris and Shin [25] survey such applications and describe sufficient conditions for limit uniqueness in games with a continuum of identical players and two actions, under slightly weaker technical assumptions than those assumed in this paper.…”

Section: Introductionmentioning

confidence: 99%

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Equilibrium selection in global games with strategic complementarities

Frankel

Morris

Pauzner

2003

Journal of Economic Theory

287

254

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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 game has a unique strategy profile that survives iterative dominance. This generalizes a result of Carlsson and van Damme (Econometrica 61 (1993) 989-1018) 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 noiseindependent selection. Keywords equilibrium selection, global games, strategic complementaries, supermodular games Disciplines Growth and Development | International Economics | Other EconomicsComments NOTICE: this is the author's version of a work that was accepted for publication in Journal of Economic Theory. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Economic Theory, [108, 1, (2003) AbstractWe 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 game has a unique strategy profile that survives iterative dominance. This generalizes a result of Carlsson and van Damme (1993) 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.Journal of Economic Literature Classification Numbers: C72, D82.

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Section: Introductionmentioning

confidence: 58%

Section: Introductionmentioning

confidence: 99%

Equilibrium selection in global games with strategic complementarities

Frankel

Morris

Pauzner

2003

Journal of Economic Theory

287

254

View full text Add to dashboard Cite

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“…Payoff functions having the supermodularity property and the related property of increasing differences make many games brimming with special properties; see e.g., Topkis (1979), Milgrom and Roberts (1990), Vives (1990), and Lippman and McCardle (1997) as references.…”

Section: Background Knowledgementioning

confidence: 99%

Capacitated Production Control with Virtual Lateral Transshipments

Yang

Qin

2007

Operations Research

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We study the optimal control of a firm with two capacitated manufacturing plants situated in two distinct geographical regions. Demands from each region are mostly satisfied by the local plant. However, if necessary, some of the newly arrived demands can be designated to be served by the other, more remote, plant. The sources of the above virtual lateral transshipments, unlike the ones involved in the real lateral transshipments, do not need to have nonnegative inventory levels throughout the transshipment processes. We develop results about the simultaneous preservation of supermodularity and diagonal dominances of the cost functions and then use these results to derive structural results for the optimal policies. Specifically, to perform optimally, we find that each plant should adopt a modified base-stock policy in observance of its own capacity, while the base level should mildly decrease in the other plant's starting inventory level. Our computational results illustrate the benefits realizable by using transshipment.

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“…In addition alumni have greater incentives 17 It can reasonably be objected that the quality of a university is not adequately measured by a single real number. However we note that multi-dimensional theories of strategic complementarity exist (see Roberts (1990), Milgrom andShannon (1994)) hence we remain con dent that our results would still hold in a more realistic setting where we allow for multiple aspects of quality. 18 There may also be some more direct externalities if there is cross teaching between nearby universities especially joint PhD programmes.…”

Section: Universitiesmentioning

confidence: 68%

Market Distortions and Corporate Governance

Kelsey

Milne

2005

SSRN Journal

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This paper studies corporate governance when a rm operates in imperfect markets. We derive rms' decisions from utility maximisation by individuals. This reduces the usual monopoly distortion. Corporate governance can effect the equilibrium in the product (or input) markets. This enables us to endogenise the objective function of the rm. If the rm cannot commit not to change its constitution, we nd a Coase-like result where all market power is lost in the limit. We present a more abstract model of governance in the presence of market distortions and discuss its implications for the governance of universities.

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Rationalizability, Learning, and Equilibrium in Games with Strategic Complementarities

Cited by 1,470 publications

References 27 publications

Equilibrium selection in global games with strategic complementarities

Equilibrium selection in global games with strategic complementarities

Capacitated Production Control with Virtual Lateral Transshipments

Market Distortions and Corporate Governance

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