Common Belief Foundations of Global Games

TitleCommon Belief Foundations of Global Games
Publication TypeJournal Article
Year of Publication2016
AuthorsMorris S, Shin HSong, Yildiz M
JournalJournal of Economic Theory
Pagination - 848
Date PublishedMay 2016
ISBN Number0022-0531, 0022-0531
KeywordsBelief, Game Theory and Bargaining Theory: General (C70), Games, Search, Learning, Information and Knowledge, Communication, Belief, Unawareness (D83)
AbstractWe study coordination games under general type spaces. We characterize rationalizable actions in terms of the properties of the belief hierarchies and show that there is a unique rationalizable action played whenever there is approximate common certainty of rank beliefs, defined as the probability the players assign to their payoff parameters being higher than their opponents'. We argue that this is the driving force behind selection results for the specific type spaces in the global games literature.