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How proper is the dominance-solvable outcome?

Author

Listed:
  • Yukio Koriyama

    (X-DEP-ECO - Département d'Économie de l'École Polytechnique - X - École polytechnique - IP Paris - Institut Polytechnique de Paris)

  • Matias Nunez

    (THEMA - Théorie économique, modélisation et applications - UCP - Université de Cergy Pontoise - Université Paris-Seine - CNRS - Centre National de la Recherche Scientifique)

Abstract

We examine the conditions under which iterative elimination of weakly dominated strategies refines the set of proper outcomes of a normal-form game. We say that the proper inclusion holds in terms of outcome if the set of outcomes of all proper equilibria in the reduced game is included in the set of all proper outcomes of the original game. We show by examples that neither dominance solvability nor the transference of decision-maker indifference condition (TDI of Marx and Swinkels [1997]) implies proper inclusion. When both dominance solvablility and the TDI condition are satisfied, a positive result arises: the game has a unique stable outcome. Hence, the proper inclusion is guaranteed.

Suggested Citation

  • Yukio Koriyama & Matias Nunez, 2014. "How proper is the dominance-solvable outcome?," Working Papers hal-01074178, HAL.
    • Handle: RePEc:hal:wpaper:hal-01074178
    Note: View the original document on HAL open archive server: https://hal.science/hal-01074178
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    References listed on IDEAS

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    1. Kukushkin, Nikolai S. & Litan, Cristian M. & Marhuenda, Francisco, 2008. "On the generic finiteness of equilibrium outcome distributions in bimatrix game forms," Journal of Economic Theory, Elsevier, vol. 139(1), pages 392-395, March.
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    3. Kohlberg, Elon & Mertens, Jean-Francois, 1986. "On the Strategic Stability of Equilibria," Econometrica, Econometric Society, vol. 54(5), pages 1003-1037, September.
    4. Borm, P.E.M., 1992. "On perfectness concepts for bimatrix games," Other publications TiSEM 9652c2b4-b09f-4c05-846a-3, Tilburg University, School of Economics and Management.
    5. Pimienta, Carlos, 2010. "Generic finiteness of outcome distributions for two-person game forms with three outcomes," Mathematical Social Sciences, Elsevier, vol. 59(3), pages 364-365, May.
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    Cited by:

    1. Bo Chen & Rajat Deb, 2018. "The role of aggregate information in a binary threshold game," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 51(3), pages 381-414, October.

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    Keywords

    Proper equilibrium; Weak dominance; Iterated elimination; Proper equilibrium.;
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