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A fixed point characterization of the dominancesolvability of lattice games with strategic substitutes

19 September 2012
Publication Type: Working Paper
JEL Code: C62, C72

This note demonstrates that a lattice game with strategic substitutes is dominancesolvable if and only if there exists a unique fixed point of the function that results from an iteration of the best response function. This finding complements a result of Milgrom and Roberts’ (1990) by which a lattice game with strategic complements is dominance-solvable if and only if there exists a unique Nash equilibrium. We illustrate our main result by an application to a model of Cournot outcomecompetition.

Series title: Working Paper 032
1 January 2006
Journal: 2007, International Journal of Game Theory, 63, 107-117
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