New study reveals how economic fundamentals drive global game outcomes
The article explores how different types of players in large coordination games, like bank runs or technology adoption, make decisions based on average actions and individual characteristics. The concept of ex ante risk dominance is introduced, showing that it aligns with global games selection in certain scenarios. This dominance helps maximize expected payoffs under pessimistic beliefs. The study identifies tipping points in economic fundamentals and highlights the importance of payoff separability for uniform global games selection.