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I giochi globali sono definiti come giochi di informazione incompleta il cui spazio dei tipi è determinato dai giocatori che osservano ciascuno un segnale rumoroso dello stato sottostante. Negli ultimi anni, si sono dimostrati utili per modellare problemi a vari campi come i cambi di regime, le corse agli sportelli, le crisi valutarie e la determinazione del prezzo del debito. La discussione si concentra sulla modellizzazione dei fenomeni di rivolta di massa attraverso i giochi globali. In questo contesto, i giocatori utilizzano strategie cutpoint, ossia partecipano alla protesta se la loro informazione è sufficientemente alta. L'aspetto interessante è delineare come l'equilibrio e gli esiti del gioco siano influenzati sia dalle azioni degli attori strategici sia dalle caratteristiche della società. Il fenomeno delle rivolte di massa è stato originariamente trattato come un gioco di coordinamento a informazione completa. Questo tipo di gioco prevede la presenza di due equilibri, uno con partecipazione totale e uno con partecipazione nulla, in modo che qualsiasi tipo di variazione strutturale o strategica non influenzi l'esito del gioco o lo ribalti. L'approccio dei giochi globali al fenomeno delle rivolte di massa si realizza attraverso la classe di modelli noti come giochi globali di cambiamento di regime e, contrariamente al caso precedente, non solo inducono un unico equilibrio finito, ma le variazioni strutturali o strategiche causano continue variazioni nell'equilibrio e di conseguenza sia nella massa dei cittadini che protestano sia nelle probabilità degli esiti del gioco. Questo contrasto può essere risolto con modelli innovativi in cui, in un contesto di gioco a informazione incompleta, eliminando le condizioni che inducono l'unicità dell'equilibrio nei giochi globali, è possibile costruire un gioco che fornisce sia un equilibrio finito con la proprietà di scorrevolezza dei giochi globali, sia equilibri infiniti di mobilitazione totale o nulla, tip, Global games in literature are commonly defined as games of incomplete information whose type space is determined by the players each observing a noisy signal of the underlying state. Over the past few years, they have proved useful in modelling scenarios and problems related to various fields of application like regime change, bank runs, currency crises, pricing debt. Our discussion focuses on modelling the phenomena of mass uprisings through the global games. In this context, players use cutpoint strategies, i.e. they participate in the protest if their information level is sufficiently high. What is interesting is to outline how the equilibrium and outcomes of the game are influenced both by the actions of the strategic actors and the characteristics of the society. The phenomena of mass uprisings were originally treated as complete information coordination game. This type of game typically involves the presence of two equilibria, one with total participation and one with zero participation, so that any type of structural or strategic variation either does not influence the outcome of the game or overturns it. The global games approach to the phenomena of mass uprisings is realized through the class of models known as global game of regime change and contrary to the previous case induce not only an unique finite equilibrium, but structural or strategic variations cause continuous variations in the equilibrium and consequently in both the mass of protesting citizens and the probabilities of the outcomes of the game. This apparent contrast can be solved through innovative models where in a context of an incomplete information game by eliminating the conditions that induce uniqueness of the equilibrium in global games it is possible to construct a game that provides both a finite equilibrium with the desirable smoothness property of the global games and infinite equilibria of total or null mobilization typical of complete information coordination game retaining the

When a government agency considers tightening a standard on a pollutant, the agency often takes into account the proportion of firms that are able to meet the new standard (what we refer to as the industry’s “voluntary adoption level”) because a higher proportion indicates a more feasible standard. We develop a novel model of regulation in which the probability of a stricter standard being enacted increases with an industry’s voluntary adoption level. In addition, in our model, the benefit of a new green technology is both uncertain and correlated across firms, and firms’ decisions exhibit both strategic substitutability (because the marketing benefit of a new green technology decreases as more firms adopt it) and complementarity (because the stricter standard is more likely to be enforced as more firms adopt it). To analyze such strategic interaction among firms’ decisions under correlated and uncertain payoffs, we use the global game framework recently developed in economics. Our analysis shows that regulation that considers an industry’s voluntary adoption level, compared with regulation that ignores it, can more effectively motivate development of a new green technology. Interestingly, uncertainty in the payoff can, in some situations, help promote development of a new green technology. Finally, we find that more aggressive regulation (a higher probability of enforcing a stricter standard for a given voluntary adoption level) encourages more firms to adopt a green technology once the technology becomes available but may discourage a firm from developing it in the first place when facing intense competition. Therefore, for an industry with intense competition, a government agency should exercise caution about being too aggressive with regulation, which could potentially stifle innovation.

Publisher's another name: JSPS Grants-in-Aid for Scientific Research (S) Central Bank Communication Design, JEL Classification Numbers: C72, D81, D82

My thesis consists of three chapters on information economics and financial economics.Chapter 1:Many decentralized over-the-counter (OTC) markets have recently become subject to new regulations requiring transparency. I build up an information model that features bilateral trade in a double auction, endogenous public signal, and inter-dealer network formation to study the effect of TRACE on the inter-dealer markets. In the trading stage, I study the private information diffusion process and endogenize the public information contained in the disseminated trading price. I show that in markets with a relatively low degree of information asymmetry, post-trade transparency makes the adverse selection more severe and reduces the surplus from asset reallocation between dealers, and thus hurts the inter-dealer network formation. Investors are more likely to be symmetrically uninformed about thinly traded bonds. The empirical results provide evidence that TRACE has a significant negative effect on the inter-dealer trading frequency for thinly traded bonds.Chapter 2 (with Kim-Sau Chung):During currency crises, large traders once simultaneously short the asset markets and currency market. We study the large trader's information manipulation in crises by introducing a large trader in an asset market and a currency-attack coordination game with imperfect information. The asset price realized in the asset market aggregates dispersed private information acting as a public signal in the currency attack game. We show that the incentive of the large trader to manipulate the asset price in favor of its currency attack leads to financial contagion. In equilibrium, the large trader's manipulating the asset price to be lower and attacking the currency regime are concurrent; the large trader's manipulation in the asset market is most significant when the public signal is in the intermediate range. To draw policy implication regarding the market transparency, we show that when the asset ma

When a government agency considers tightening a standard on a pollutant, the agency often takes into account the proportion of firms that are able to meet the new standard (what we refer to as the industry's "voluntary adoption level"), because a higher proportion indicates a more feasible standard. We develop a novel model of regulation in which the probability of a stricter standard being enacted increases with an industry's voluntary adoption level. In addition, in our model, the benefit of a new green technology is both uncertain and correlated across firms, and firms' decisions exhibit both strategic substitutability (because the marketing benefit of a new green technology decreases as more firms adopt it) and complementarity (because the stricter standard is more likely to be enforced as more firms adopt it). To analyze such strategic interaction among firms' decisions under correlated uncertain payoffs, we use the global game framework recently developed in economics. Our analysis shows that regulation that considers an industry's voluntary adoption level, compared with regulation that ignores it, can more effectively motivate development of a new green technology. Surprisingly, uncertainty in the payoff can also help promote development of a new green technology. Finally, we find that more aggressive regulation (a higher probability of enforcing a stricter standard for a given voluntary adoption level) encourages more firms to adopt a green technology once the technology becomes available, but may discourage a firm from developing it in the first place when facing intense competition. Therefore, for an industry with intense competition, a government agency should exercise caution about being too aggressive with regulation, which could potentially stifle innovation.

This dissertation consists of three essays that adopt both theoretical and empirical methods of analysis to study certain economies in which the incomplete information and the strategic complementarities between players are important. Chapter 1 explains the topics discussed in the subsequent chapters and gives a brief survey on the literature. In Chapter 2, I revise a traditional global game model by dividing the continuum of players into a group of speculators and a group of stakeholders. It is found that the uniqueness property remains in the new game. Then I extend the static game to a two-stage game and investigate the efficacies of certain label changing mechanisms proposed by the authority to stabilize the regime in the dynamic context. It is shown that a label changing mechanism allowing for downward social mobility may not work, whereas a label changing mechanism allowing for upward social mobility generally makes the regime more stable. In Chapter 3, I add a speculator and an authority to a bank-run model to investigate how the speculator endangers a business or an economy, and what the authority can do about it. In particular, I show that the speculator can increase the financial system's vulnerability by serving as a coordinating device for the investors and thus triggering the crisis. It is further shown that deterring the speculator may not undo the speculator's impact because of multiplicity problem; rewarding holding investors is useless; and eliminating the preemption motives among investors works given enough effort. A discussion of the 1997 Asian financial crisis and the IMF's role in it is also included. Chapter 4 develops a repeated beauty-contest game to investigate the effect of previous winners' actions on the spread of subsequent players' actions. I first characterize the unique equilibrium of the game. Then I focus on the equilibrium dynamics of several variances depicting different forms of action variability. It is found that whether or no

The allocation of order flow to alternative trading systems can be understood as a game with strategic substitutes between buyers on the same side of the market, as well as one of positive network externalities. We consider the allocation of order flow between a crossing network and a dealer market and show that small differences in traders' preferences generate a unique switching equilibrium, in which patient traders use the crossing network while impatient traders submit orders directly to the dealer market. Our model explains why assets with large turnovers and low price volatility are likely to be traded on crossing networks, while less liquid assets are traded on dealer markets.

ISER discussion paper, April 2009, Revised September 2009, Secondly Revised May 2011, If potential donors for a charity project possess the warm-glow properties in their preferences, we can represent their behavior with a coordination game. Accordingly, we construct a simultaneous incomplete information game model of charitable giving based on a simple global coordination game. We demonstrate that merely by the effect of seed money to shift the threshold requirement of the donations for project success downwards, the proportion of donors and the total amount of donations strictly and continuously increase with the amount of seed money. This result is partially compatible with the field experimental evidence in List and Lucking-Reiley [List, J. A., Lucking-Reiley, D., 2002. The Effects of Seed Money and Refunds on Charitable Giving: Experimental Evidence from a University Capital Campaign. Journal of Political Economy 110 (1), 215-233].

While virtually all currency crisismodels recognise that the fate of a currency peg depends on how tenaciously policy makers defend it, they seldom model how this is done. We incorporate themechanics of speculation and the interest rate defence against it in the model ofMorris and Shin (American Economic Review 88, 1998). Our model captures that the interest rate defence reduces speculators’ profits and thus postpones the crisis. It predicts that well before the fall of a currency interest rates are increased to offset the buildup of exchange market pressure, and this then unravels in a sharp depreciation. This pattern is at odds with predictions of standard models, but we show that it fits well with reality.

We consider a dynamic stochastic model of currency attacks, characterised by imperfect information about a fundamental. Agents not only decide whether to attack the peg but also formulate expectations concerning the probability of future devaluation. The subjective devaluation probabilities influence the inflation expectations, which, in turn, affect the next-period wage level and unemployment. Hence, expectations affect the following-period fundamental and the policymaker¿s ability to resist an attack. Agents decide upon next-period wage having observed whether the current-period currency attack has been successful or not: this publicly available information is sufficient to allow for a coordinated effect among agents, leading to multiple equilibria. Our results imply that a ¿transparent policy¿ during a currency crisis is in the policymaker¿s interest.

We investigate the effects of forward looking behavior in technology adoption. The setup is an overlapping generation model where agents choose between two alternative networks taking in consideration both the installed base and the expected base. The latter element is the distinctive feature of our approach. We use results from the global games literature to select the unique equilibrium on which agents coordinate their expectations. We consider both the cases of incompatible and compatible technologies, and show that technologies cannot lock-in, while the adoption path exhibits hysteresis. Network choices are characterized both in terms of their long run properties and expected time of adoption.