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An Extensive Game as a Guide for Solving a Normal Game

In: MODELS OF BOUNDED RATIONALITY AND MECHANISM DESIGN

Author

Listed:
  • Jacob Glazer
  • Ariel Rubinstein

Abstract

We show that for solvable games, the calculation of the strategies which survive iterative elimination of dominated strategies in normal games is equivalent to the calculation of the backward induction outcome of some extensive game. However, whereas the normal game form does not provide information on how to carry out the elimination, the corresponding extensive game does. As a by-product, we conclude that implementation using a subgame perfect equilibrium of an extensive game with perfect information is equivalent to implementation through a solution concept which we call guided iteratively elimination of dominated strategies which requires a uniform order of elimination.

Suggested Citation

  • Jacob Glazer & Ariel Rubinstein, 2016. "An Extensive Game as a Guide for Solving a Normal Game," World Scientific Book Chapters, in: MODELS OF BOUNDED RATIONALITY AND MECHANISM DESIGN, chapter 1, pages 1-11, World Scientific Publishing Co. Pte. Ltd..
  • Handle: RePEc:wsi:wschap:9789813141339_0001
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    More about this item

    Keywords

    Bounded Rationality; Behavioral Economics; Implementation; Mechanism Design; Persuasion;
    All these keywords.

    JEL classification:

    • E03 - Macroeconomics and Monetary Economics - - General - - - Behavioral Macroeconomics

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