Pathologies of iterated strict dominance revisited

Xuewen Qian and Chen Qu

Economics Letters, 2025, vol. 247, issue C

Abstract: We revisit two pathologies of iterated elimination of strictly dominated strategies (IESDS) in infinite games: spurious Nash equilibria and order dependence. By introducing bounded dominance relations (Hsieh et al., 2023), we demonstrate that a bounded version of IESDS mitigates the former issue and is neutral to the latter. The second point is illustrated through a series of examples using ordinals. We also provide a sufficient and necessary condition for the non-existence of spurious Nash equilibria.

Keywords: Strict dominance; Iterated elimination; Nash equilibrium; Boundedness; Forgetfulness-proofness (search for similar items in EconPapers)
JEL-codes: C70 C72 (search for similar items in EconPapers)
Date: 2025
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:247:y:2025:i:c:s0165176525000151

DOI: 10.1016/j.econlet.2025.112178

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