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March 29, 2026Econometrica1 citationsOpen Access

Monotonicity and Robust Implementation Under Forward‐Induction Reasoning

PBPierpaolo BattigalliECEmiliano Catonini

Key Points

  • The aim is to explore how beliefs and restrictions affect predictions in sequential games with incomplete information.
  • Analyzed paths of rational play under forward-induction reasoning.
  • Investigated the impact of transparent restrictions on players' beliefs.
  • Examined strong rationalizability in the context of payoff uncertainty.
  • Predictions became sharper with restrictions focused on initial beliefs about types.
  • Demonstrated that forward-induction reasoning improves implementable functions compared to simultaneous mechanisms.
  • Solved an open problem concerning social choice functions under sequential mechanisms.

Abstract

In sequential games, the set of paths consistent with rationality and forward‐induction reasoning may change nonmonotonically when adding transparent restrictions on players' beliefs. Yet, we prove that—in an incomplete‐information environment—predictions become sharper when the restrictions only concern initial beliefs about types. Thus, strong rationalizability for games with payoff uncertainty characterizes the path predictions of forward‐induction reasoning across all possible restrictions on players' hierarchies of exogenous beliefs. With this, we can solve an open problem: the implementation of social choice functions through sequential mechanisms under forward‐induction reasoning—which considerably expands the realm of implementable functions compared with simultaneous mechanisms (Müller (2016))—is indeed robust in the sense of Bergemann and Morris (2009).

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Cite This Study

Battigalli et al. (2026) studied this question.

synapsesocial.com/papers/69c8c0b0de0f0f753b39b7e9https://doi.org/10.3982/ecta23709
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