Publication Type
Working Paper
Version
Publisher’s Version
Publication Date
12-2020
Abstract
We define a local notion of weak dominance that speaks to the true choice problems among actions in a game tree and does not necessarily require to plan optimally for the future. A strategy is (globally) weakly dominant if and only if it prescribes a locally weakly dominant action at every decision node it reaches, and in this case local weak dominance is characterized by a (wishful-thinking) condition that requires no forward planning. From this local perspective, we identify form of contingent reasoning that are particularly natural, despite the absence of an obviously dominant strategy (Li, 2017). Following this approach, we construct a dynamic game that implements the Top Trading Cycles allocation under a notion of local obvious dominance that captures a form of independence of irrelevant alternatives.
Keywords
Weak dominance, obvious dominance, strategy-proofness, implementation
Discipline
Economic Theory
Research Areas
Economic Theory
First Page
1
Last Page
23
Publisher
SMU Economics and Statistics Working Paper Series, Paper No. 01-2021
City or Country
Singapore
Embargo Period
3-25-2021
Citation
CATONINI, Emiliano and XUE, Jingyi.
Local dominance. (2020). 1-23.
Available at: https://ink.library.smu.edu.sg/soe_working_paper/2
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.