Dependence and Uniqueness in Bayesian Games

In: The B.E. journal of theoretical economics, Band 13, Heft 1, S. 1-25

Abstract

Abstract: This paper studies uniqueness of equilibrium in symmetric 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 literature on global games, noise is not assumed to be additive. Dependence is modeled using the theory of copulas.