Information acquisition in global games of regime change

We study costly information acquisition in global games, which are coordination games where payo¤s are discontinuous in the unobserved state and in the average action of agents. We show that only symmetric equilibria exist and we provide su¢ cient conditions for uniqueness. We then characterize the value of information in this context and link it to the underlying parameters of the model. We explore the notion of equilibrium e¢ ciency, complementarities in information choices, and the trade-o¤ between public and private information. We show that the unique equilibrium of the game is ine¢ cient and that strategic complementarities in actions do not always translate into strategic complementarities in information choices. Finally, we …nd that public and private information can be complements. These results contrast …ndings in beauty contest models, which are coordination games where payo¤s depend continuously on the quadratic distance between individual actions and both the unobserved state and the average action of agents. We argue that these disparities are a result of di¤erences in the value of additional information across these two classes of models. Therefore, our results emphasize the importance of the type of payo¤ structures (continuous versus discrete) in coordination games.