How does Dodge work exactly?

Dexterity increases the chance to dodge, and as a Monk I also have a mantra available that also increases the dodge chance. I'm wondering how useful a high dodge value actually is and if I should take this mantra over other ones.

How exactly does dodge work? Is it simply an x% chance to dodge an attack, unmodified by any enemy stats? Does it work for any kind of attack, physical, magical, AoE?

Yes, dodge simply gives to attackers a x% to miss their attacks. It works on all attack types:

• Melee Attacks
• Ranged Attacks
• Ranged Spells
• Ground-based AoE

Dodge does not work only against status effect modifier like fear, jail, etc.

Dodge is linked to dexterity and seems not hard-capped but its formula has a diminishing effects like explained in this answer.

2000 Dexterity, for example, provide you a 40% dodge:

100*0.100 + 400*0.025 + 500*0.020 + 1000*0.010 = 40%

The dodge % is not hardcapped, but does have diminishing effect.

Some dex equations I've developed that are 100% accurate: From 1 to 100 Dex, your dodge % is .1*(Dex) From 100 to 500 Dex, your dodge % is .025*(Dex)+7.5 From 500 to 850? Dex, your dodge % is .0202*(Dex)+9.9

Above that I stopped calculating, but until these points the equations are clearly linear functions that vary depending on your total dex.

Items and skills that add to dodge % are applied to this base value by multiplying the bonus by your remaining chance to be hit, and adding that value to your base dodge.

For example, my Barbarian with 371 Dex has 16.8% base dodge, meaning 83.2% of attacks will hit. Using War Cry (+15% dodge) will add 12.48% to the base dodge chance (83.2 * 15%). dodge bonuses continue to be applied toward your remaining chance to be hit.