Global Games

Global Games with Strategic Substitutes: An Experimental Investigation

We experimentally investigate behavior in a market entry game with strategic substitutes using the Global Games paradigm of Harrison and Jara-Moroni (2021). Our experiment provides some support for the theory. A majority of the subjects adopt threshold strategies with few mistakes. While the estimated thresholds deviate from point predictions, the comparative statics still hold. Finally, a majority of outcomes correspond to the global games equilibrium even in regions of multiplicity.