Hybrid Procedures

Yukio Koriyama and Matias Nuñez

No 2014-02, THEMA Working Papers from THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise

Abstract: We consider hybrid procedures: a first step of reducing the game by iterated elimination of weakly dominated strategies (IEWDS) followed by a second step of applying an equilibrium refinement. We show that the set of perfect/proper outcomes of a reduced normal-form game might be larger than the set of the perfect/proper outcomes of the whole game by applying IEWDS. Even in dominance solvable games in which all the orders of IEWDS select a unique singleton in the game, the surviving outcome need not be a proper equilibrium of the whole game. However, in dominance solvable games that satisfy the transference of decision maker indifference condition (TDI of Marx and Swinkels, 1997), the surviving outcome coincides with the unique stable one and hence is proper.

Keywords: Weak dominance; Iterated elimination; Proper equilibrium. (search for similar items in EconPapers)
JEL-codes: C7 C72 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-gth, nep-hpe and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:ema:worpap:2014-02

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