Unai Emery conceded Manchester City "showed their superiority" in Sunday's 3-1 Premier League win over Arsenal at the Etihad Stadium.
The Gunners fell behind to Sergio Aguero's opener after 46 seconds but responded well to level through Laurent Koscielny.
However, Aguero went on to complete his hat-trick as the visitors fell away badly, slipping to sixth in the table at the end of a weekend which saw both Chelsea and Manchester United victorious.
And Emery knows his side were second best against Pep Guardiola's men, particularly in the second half.
"They showed their superiority over 90 minutes," the Gunners boss told Sky Sports.
"The first 45 minutes, we defended well together and had some chances on the counter-attack to stay in the match.
"But after the 2-1, in the second half they showed their superiority. We cannot defend very well and we were not having chances to get in their box.
"They held a level for the 90 minutes and our level in the second half was worse than the first.
"In the first half we held our lines together and defended well. Sometimes we did our transition.
"At 1-1 we can be optimistic to take some actions attacking. We want to play by being in the match all of the time, but the second half, our mentality was not to win the match."
Arsenal sit three points behind Chelsea, who occupy the final Champions League spot, with a trip to rock-bottom Huddersfield Town next weekend for Emery's side.