Expand to by a constant for each . The diagram of a structure contains all atomic and negated atomic -sentences true in . The elementary diagram contains every -sentence true in .
The method of diagrams combines one of these sets with another theory and applies the compactness theorem. A model of yields an embedding of by , while a model of yields an elementary embedding.
On , interpret a constant at its common value, a function on a tuple by choosing one containing the tuple, and a relation similarly. Total ordering of the indices and compatibility of substructures make these definitions independent of the chosen stage. Every is then a substructure of .
For an elementary chain, induction on formulas proves
The atomic step follows from the induced structure, Boolean steps are immediate, and for an existential formula any witness in the union lies in a later containing the parameters; elementarity between and moves existence back to . This is the elementary chain theorem.
A sentence with quantifier-free is preserved by a union of an embedding chain: a tuple occurs at some stage, a witness exists at that stage, and quantifier-free formulas are preserved in the union. Thus every forall-exists axiomatized theory is inductive.
Conversely, let contain all forall-exists consequences of and suppose . The diagram-and-compactness sandwich lemma says that one can construct
where every and every . For completeness, the first extension is obtained by adding to the diagram of together with all universal formulas over true there. A finite inconsistency would give a forall-exists consequence of false in . The resulting extension embeds into an elementary extension by the method of diagrams.
The form an embedding chain and have the same union as the . By the assumed preservation, ; by the elementary chain theorem, . Hence , so . The two theories are equivalent, proving the characterization.
A model-complete theory is one for which every embedding between models is elementary. If is an embedding chain of models, all transition embeddings are therefore elementary. The elementary chain theorem shows that the union is a model elementarily extending every , so the theory is preserved under unions of embedding chains. Part (c) then gives an axiomatization by forall-exists sentences.

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