Information acquisition in global games of regime change

We study costly information acquisition in global games of regime change (that is, coordination games where payoffs are discontinuous in the unobserved state and in the agents' average action). We show that only symmetric equilibria exist and provide sufficient conditions for uniqueness. We then characterize the value of information in these games and link it to the underlying parameters of the model. We investigate equilibrium efficiency, complementarities in information choices, and the trade-offs between public and private information. We show that information acquisition can be inefficient and that strategic complementarities in actions do not always translate into strategic complementarities in information acquisition. Finally, we find that public and private information can be complements. These results contrast findings in linear-quadratic models, where payoffs depend continuously on both the unobserved state and the agents' average action.