Global Game Research Articles

SOLUTION UNIQUENESS IN A CLASS OF CURRENCY CRISIS GAMES

A common feature of many speculative attack models on currencies is the existence of multiple equilibrium solutions. When choosing the equilibrium strategy, a trader faces Knightian uncertainty about the rational choice of the other traders. We show that the concept of Choquet expected utility maximization under Knightian uncertainty leads to unique equilibria. In games of incomplete information the optimal strategy maximizes the expected utility with respect to a two-dimensional information: environment and rationality. We define a new concept of equilibria, the Choquet-expected-Nash-equilibria, which allows the analysis of decisions under uncertainty, which result in multiple equilibria in standard analysis. We provide uniqueness theorems for a wide class of incomplete information games including global games and apply them to fairly general currency attack models. The uniqueness of the equilibrium remains valid for arbitrary noise distributions, positively correlated signals, the existence of large traders, individual payoff functions, and for the case that non attacking traders suffer a loss in case of a successful attack, as is the case for investors in the attacked country.

Local Players in Global Games: The Strategic Constitution of a Multinational Corporation

Cross-border mergers and acquisitions have been a pivotal interest in international business research. The post-acquisition integration is often a complex process that may stretch over many years, which is not well explained by theoretical tools to management researchers. Yet, post-acquisition integration processes are essential to understanding modern MNE that grow by international acquisition; in fact, some multinationals seem always involved in some form of post-acquisition processes.

Local Players in Global Games: The Strategic Constitution of a Multinational Corporation. By Peer Hull Kristensen and Jonathan Zeitlin. Oxford: Oxford University Press, 2005. Pp. 352. $129.50 (cloth); $39.50 (paper).

Previous articleNext article No AccessBook ReviewLocal Players in Global Games: The Strategic Constitution of a Multinational Corporation. By Peer Hull Kristensen and Jonathan Zeitlin. Oxford: Oxford University Press, 2005. Pp. 352. $129.50 (cloth); $39.50 (paper).Frank DobbinFrank DobbinHarvard University Search for more articles by this author Harvard UniversityPDFPDF PLUSFull Text Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by American Journal of Sociology Volume 111, Number 3November 2005 Article DOIhttps://doi.org/10.1086/500768 Views: 42Total views on this site Permission to reprint a book review printed in this section may be obtained only from the author.PDF download Crossref reports no articles citing this article.

Global Games. By Martin Van Bottenburg, translated from the Dutch by Beverley Jackson (Urbana: University of Illinois Press, 2001. viii, 282 pp.)

Journal Article Global Games. By Martin Van Bottenburg, translated from the Dutch by Beverley Jackson (Urbana: University of Illinois Press, 2001. viii, 282 pp.) Get access Helen Pussard Helen Pussard Roehampton Univeristy Search for other works by this author on: Oxford Academic Google Scholar Journal of Social History, Volume 39, Issue 1, Fall 2005, Pages 294–296, https://doi.org/10.1353/jsh.2005.0119 Published: 01 October 2005

Learning strategies for global games with delayed payoffs

Learning strategies for global games with delayed payoffs

Self-Fulfilling Currency Crises: The Role of Interest Rates

We develop a model of currency crises, in which traders are heterogeneously informed, and interest rates are endogenously determined in a noisy rational expectations equilibrium. In our model, multiple equilibria result from distinct roles an interest rate plays in determining domestic asset market allocations and the devaluation outcome. Except for special cases, this finding is not affected by the introduction of noisy private signals. We conclude that the global games results on equilibrium uniqueness do not apply to market-based models of currency crises.

Return Dynamics under Coordination Risk: A Quantitative Approach

Coordination games, such as global games models, have proven useful in theoretically explaining agents behavior and market outcomes during financial crisis. Such models have not been estimated. We propose extensions to the standard global games models to a dynamic context of normal and turbulent times, and use efficient method of moments as estimation procedure. We apply the model to the yen dollar crisis of 1998.

Complementarities and Games: New Developments

The theory of monotone comparative statics and supermodular games is presented as the appropriate tool to model complementarities. The approach, which has not yet been fully incorporated into the standard toolbox of researchers, makes the analysis intuitive and simple, helps in deriving new results and in casting new light on old ones. The paper takes stock of recent contributions and develops applications to industrial organization (oligopoly, R&D, and dynamics), finance (currency and banking crisis) and macroeconomics (adjustment and menu costs). Particular attention is devoted to Markov games and to games of incomplete information (including global games).

An Application of Global Games to Signalling Models

In a flrst attempt to apply the global games methodology to signalling games, Ewerhart and Wichardt (2004) analyse a beer-quiche type signalling game with additional imperfect information about the preferences of the receiver. Their approach allows them to dismiss the unreasonable pool- ing on quiche equilibrium. This paper revisits their example and discusses how an extension of the set of strategies for the sender afiects the analy- sis. Interestingly, for an extended beer-quiche game, a unique equilibrium is selected while two equilibria are consistent with the Intuitive Criterion (Cho and Kreps, 1987). Apart from the technical analysis, potential eco- nomic applications of the results, e.g. in a context of limit pricing and entry deterrence, are indicated.

The global chess game … or is it go? Market-entry strategies for emerging markets

Two contrasting metaphors of market-entry strategy for emerging markets are developed in this article: the Global Chess Game and the Game of Go. Understanding these paradigms is critical for business success and for building robust theories of international competitor analysis in emerging markets, particularly in Asia. The Game of Go represents a long-term strategy of Japanese companies, dominant foreign direct investment players in the region, and it represents the global strategy of many Asian emerging market companies as they grow within the region and beyond. A Competitor Analysis Framework for Emerging Markets is proposed that incorporates culture and other antecedents as precursors of competitor analysis and strategy formulation. © 2005 Wiley Periodicals, Inc.

Information Dynamics and Equilibrium Multiplicity in Global Games of Regime Change

Global games of regime change -- that is, coordination games of incomplete information in which a status quo is abandoned once a sufficiently large fraction of agents attacks it -- have been used to study crises phenomena such as currency attacks, bank runs, debt crises, and political change. We extend the static benchmark examined in the literature by allowing agents to accumulate information over time and take actions in many periods. It is shown that dynamics may lead to multiple equilibria under the same information assumptions that guarantee uniqueness in the static benchmark. Multiplicity originates in the interaction between the arrival of information over time and the endogenous change in beliefs induced by the knowledge that the regime survived past attacks. This interaction also generates interesting equilibrium properties, such as the possibility that fundamentals predict the eventual regime outcome but not the timing or the number of attacks, or that dynamics alternate between crises and phases of tranquility without changes in fundamentals.

'The Only Place Where ''Success'' Comes before ''Work'' Is in the Dictionary...?'

'The Only Place Where ''Success'' Comes before ''Work'' Is in the Dictionary...?'

The global game of football: The 2002 World Cup and regional development in Japan

Analysis of major sports or 'mega'-events, including the Soccer World Cup, enables consideration of several overlapping and intersecting issues. These include: centre-periphery relationships related to governance in world sport; power relations between nation states, supranational sport associations and the sports business; the media-sport-business connection; the cultural production of ideologies needed to cover emergent fissures-- such as over who actually controls 'global games'; and what the costs and benefits of hosting these events actually are. By focusing on the relationship between the 2002 World Cup and the development of the social and football infrastructure in contemporary Japan, this paper offers insight into the relationship between the global and the local, and especially the last of these issues. It concludes that attempts to utilise football and the (co-)hosting of the 2002 World Cup for sports purposes has benefited the development of the sport as a commercial spectacle rather than as an everyday practice. Related goals, such as the relocation of population from the centre to the periphery, economic income generation and a general improvement in the quality of life of the Japanese population as a whole, are still far from being accomplished.

Global games: Culture, political economy and sport in the globalised world of the 21st century

During the past three decades sport has assumed an ever greater role within the globalisation process and in the regeneration of national, regional and local identities in the postcolonial and global age. With much of global culture displayed by the media, events, particularly significant sporting ones such as the Olympic Games or the soccer World Cup, have become highly sought after commodities as developed countries, and increasingly some leading developing countries, move towards event-driven economies. In the process, however, many countries are left behind without the necessary infrastructure or visibility to compete successfully. Furthermore, the process of displaying a culture in the lead-up to an event and during the event itself has had to focus on ready-made markets, thus reinforcing stereotypes about a place and its people. This paper discusses the paradoxes and inequalities brought on by the sport-media-tourism complex that drives the emphasis on global sporting events.

The allure of global games for 'semi-peripheral' polities and spaces: A research agenda

Exploring the increasing propensity of 'semi-peripheral' polities and spaces to host major games as a pivotal strategic response to the exigencies of globalisation, it is contended that pursuing such events is intimately connected to the perceived expansion of 'marketing power' on the one hand, and to the legitimisation and celebration of conceptions of national identity and political orders, on the other. Given that various contingencies bear upon these sought-after outcomes, this analytical framework underscores the significance of questions about global inequality, power and identity to explain the apparent allure of global games. Hence, to determine whether major games deliver the kind of benefits proclaimed by proponents, requires asking questions about (1) identity building and signalling; (2) development and (3) political liberalisation and human rights.

The Theory of Global Games on Test: Experimental Analysis of Coordination Games with Public and Private Information

The theory of global games has shown that coordination games with multiple equilibria may have a unique equilibrium if certain parameters of the payoff function are private information instead of common knowledge. We report the results of an experiment designed to test the predictions of this theory. Comparing sessions with common and private information, we observe only small differences in behavior. For common information, subjects coordinate on threshold strategies that deviate from the global game solution towards the payoff-dominant equilibrium. For private information, thresholds are closer to the global game solution than for common information. Variations in the payoff function affect behavior as predicted by comparative statics of the global game solution. Predictability of coordination points is about the same for both information conditions.

Japanese football and world sports: raising the global game in a local setting

Professional football in Japan, as elsewhere, has increasingly become linked to agents, structures, and processes of global capitalism. However, football is as much about culture as it is about business. Placing Japanese football into the context of world sports seems to be a promising endeavour to get fresh insight into the dialectics of the global and the local in transnational cultural flows and the processes underlying the globalization of sports. By analysing the institutional arrangements, vested interests, and power relationships of parties involved in the production, practice, and consumption of ‘the people’s game’ in Japan, this study explores a recent showcase for the globalization of sports. It also addresses the question of whether the culture of sports may be considered a political agent that affects political choices, for example in regional development planning, local economic policy, or public health policy. As popular interests and domestic politics have shaped and continue to shape football in Japan, it is argued that globalization cannot be regarded as a commercially driven process aiming at the creation of a global market for products whose popular consumption leads to the standardization of cultures that were once distinctive.

Informational Contagion of Sudden Stops in a Global Games Framework

This paper highlights the cross-country spread of self-fulfilling financial crises through an informational channel. It sets up a two-country framework of investment with strategic complementarities and incomplete information about economic fundamentals. Each market may be subject to sudden stops, triggered by agents preemptively withdrawing their investments for fear others do so. After observing a massive capital outflow from one country, agents downgrade common fundamentals, and therefore have higher requirements regarding factors specific to the other country. This in turn may induce a crisis in the latter, which is not justified by idiosyncratic events or economic interdependence.

Liquidity Black Holes *

Traders with short horizons and privately known loss limits interact in a market for a risky asset. Risk-averse, long horizon traders generate a downward sloping residual demand curve that faces the short-horizon traders. When the price falls close to the loss limits of the short horizon traders, selling of the risky asset by any trader increases the incentives for others to sell. Sales become mutually reinforcing among the short term traders, and payoffs analogous to a bank run are generated. A “liquidity black hole” is the analogue of the run outcome in a bank run model. Short horizon traders sell because others sell. Using global game techniques, we solve for the unique trigger point at which the liquidity black hole comes into existence. Empirical implications include the sharp V-shaped pattern in prices around the time of the liquidity black hole.

The European Union Regulatory Approach of Online Gambling and its Impact on the Global Gaming Industry

IN THE ABSENCE of European Union (EU) legislation, gambling is regulated at the national level by all EU Member States. All EU Member States, except the United Kingdom and some offshore jurisdictions, have imposed strict limitations on cross-border gambling activities in order to control and limit the supply of gambling in their territory and to ensure that the revenue of gambling is to a certain extent used for public benefit. Member States have the right to prohibit or restrict games offered from other EU jurisdictions, even if they are provided by means of information society (internet, interactive television, mobile betting, etc.).1 The Scandinavian countries (Finland,2 Sweden, and to a lesser extent Norway) apply the most stringent regulatory standards to gambling services whereby only state-controlled operators are competent to offer games of chance. There was a lot of uncertainty among the gambling industry stakeholders at the beginning of the 1990’s. There were rumors that the European Commission planned to harmonize the national gambling provisions. In this regard, the Commission undertook in 1991 a study called “Gambling in the single market— A study of the current legal and market situation.” Based on this study, the Commission would consider whether or not harmonization of national gambling rules was necessary. However, during the EU summit in Edinburgh of December 12, 1992, the European Council decided not to regulate gambling at the EU level, as it found that gambling is better dealt with at the national level.3 Based on this conclusion, the European Commission stopped its plans to regulate gambling at the EU level. Ten years after Edinburgh, however, the European Commission is reconsidering whether and under what form it should regulate gambling at the EU level. The Commission has a number of options. First, it may pass legisla-