Correlated Equilibrium and Sunspot Equilibrium

Francoise Forges and James Peck

Economic Theory, 1995, vol. 5, issue 1, 33-50

Abstract: We show by an example that the sunspot equilibria of a competitive economy are not equivalent to the correlated equilibria if sunspots generate transfers between (extrinsic) state of nature (through a contingent commodities market). Nevertheless, we prove that the sunspot equilibrium allocations of a standard overlapping generations economy coincide with the (strategic form) correlated equilibrium allocations of a natural market game mimicking the economy.

Date: 1995
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Working Paper: Correlated equilibrium and sunspot equilibrium (1995)
Working Paper: Correlated equilibrium and sunspot equilibrium (1991)
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