Dominance-Solvable Lattice Games

Alexander Zimper

No 04-18, Sonderforschungsbereich 504 Publications from Sonderforschungsbereich 504, Universität Mannheim, Sonderforschungsbereich 504, University of Mannheim

Abstract: This paper derives sufficient and necessary conditions for dominance-solvability of so-called lattice games whose strategy sets have a lattice structure while they simultaneously belong to some metric space. The argument combines and extends Moulin's (1984) approach for nice games and Milgrom and Roberts' (1990) approach for supermodular games. The analysis covers - but is not restricted to - the case of actions being strategic complements as well as the case of actions being strategic substitutes. Applications are given for n-firm Cournot oligopolies, auctions with bidders who are optimistic - respectively pessimistic - with respect to an imperfectly known allocation rule, and Two-player Bayesian models of bank runs.

Pages: 36 pages
Date: 2004-05-17
Note: I thank Jürgen Eichberger, Christian Ewerhart, Itzhak Gilboa, Alexander Ludwig, Martin Hellwig, and Paul Milgrom for helpful comments. Financial support from the Deutsche Forschungsgemeinschaft is gratefully acknowledged.
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Working Paper: Dominance-solvable lattice games (2004)
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