Template-Type: ReDIF-Paper 1.0
Author-Name: Herve Moulin
Author-Name-First: Herve
Author-Name-Last: Moulin
Author-Name: Indrajit Ray
Author-Name-First: Indrajit
Author-Name-Last: Ray
Author-Name: Sonali Sen Gupta
Author-Name-First: Sonali
Author-Name-Last: Sen Gupta
Title: Coarse correlated equilibria in an abatement game
Abstract: We consider the well-analyzed abatement game (Barrett 1994) and prove that correlation among the players (nations) can strictly improve upon the Nash equilibrium payoffs. As these games are potential games, correlated equilibrium — CE — (Aumann 1974, 1987) cannot improve upon Nash; however we prove that coarse correlated equilibria — CCE — (Moulin and Vial 1978) may do so. We compute the largest feasible total utility and hence the efficiency gain in any CCE in those games: it is achieved by a lottery over only two pure strategy profiles.
Creation-Date: 2014
File-URL: http://www.lancaster.ac.uk/media/lancaster-university/content-assets/documents/lums/economics/working-papers/CoarseCorrelatedEquilibria.pdf
File-Format: application/pdf
Number: 68684722
Classification-JEL: C72, Q52
Keywords: Abatement game, Coarse correlated equilibrium, Efficiency gain
Handle: RePEc:lan:wpaper:68684722