Dependence and uniqueness in Bayesian games

Working paper

This paper studies uniqueness of equilibrium in symmetric 2 x 2 bayesian games. It shows that if signals are highly but not perfectly dependent then players play their risk-dominant actions for all but a vanishing set of signal realizations. In contrast to the global games literature, noise is not assumed to be additive. Dependence is modeled using the theory of copulas.

Authors: Beggs, A

• Publication status: Published
• Publisher: University of Oxford
• Series: Department of Economics Discussion Paper Series
• Publication date: 2012-04-01
• Paper number: 603
• Keywords: copulas; uniqueness; global games; risk dominance; Bayesian games