Pierpaolo Battigalli: Monotonicity and Robust Implementation Under Forward-Induction Reasoning
Abstract: We prove that, in sequential games with payoff uncertainty, strong rationalizability characterizes the predictions of forward-induction reasoning across all possible restrictions to players' initial hierarchies of beliefs on the exogenous uncertainty. With this, we show that the implementation of social choice functions through sequential mechanisms under common strong belief in rationality (in the sense of Muller, J.Econ.Theory 2016), which considerably expands the realm of implementable functions compared with simultaneous-move mechanisms, is robust in the sense of Bergemann and Morris (Theoretical Econ. 2009).
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