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Local Dominance

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  • Emiliano Catonini
  • Jingyi Xue

Abstract

We define notions of dominance between two actions in a dynamic game. Local dominance considers players who have a blurred view of the future and compare the two actions by first focusing on the outcomes that may realize at the current stage. When considering the possibility that the game may continue, they can only check that the local comparison is not overturned under the assumption of "continuing in the same way" after the two actions (in a newly defined sense). Despite the lack of forward planning, local dominance solves dynamic mechanisms that were found easy to play and implements social choice functions that cannot be implemented in obviously-dominant strategies.

Suggested Citation

  • Emiliano Catonini & Jingyi Xue, 2020. "Local Dominance," Papers 2012.14432, arXiv.org, revised Apr 2023.
    • Handle: RePEc:arx:papers:2012.14432
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    References listed on IDEAS

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    1. Ashlagi, Itai & Gonczarowski, Yannai A., 2018. "Stable matching mechanisms are not obviously strategy-proof," Journal of Economic Theory, Elsevier, vol. 177(C), pages 405-425.
    2. Marek Pycia & Peter Troyan, 2023. "A Theory of Simplicity in Games and Mechanism Design," Econometrica, Econometric Society, vol. 91(4), pages 1495-1526, July.
    3. Mackenzie, Andrew & Zhou, Yu, 2022. "Menu mechanisms," Journal of Economic Theory, Elsevier, vol. 204(C).
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