Improving Nash by Coarse Correlation

Herve Moulin, Indrajit Ray (rayi1@cardiff.ac.uk) and Sonali Sen Gupta

Discussion Papers from Department of Economics, University of Birmingham

Abstract: We consider a class of symmetric two-person quadratic games where coarse correlated equilibria - CCE - (Moulin and Vial 1978) can strictly improve upon the Nash equilibrium payoffs, while correlated equilibrium - CE - (Aumann 1974, 1987) cannot, because these games are potential games. We compute the largest feasible total utility in any CCE in those games, and show that it is achieved by a CCE involving only two pure strategy profiles. Applications include the Cournot duopoly and the game of public good provision, where the improvement over and above the Nash equilibrium payoff can be substantial.

Keywords: Coarse correlated equilibrium; Quadratic games; Duopoly models; Public good (search for similar items in EconPapers)
JEL-codes: C72 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2013-03
New Economics Papers: this item is included in nep-gth, nep-hpe and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Improving Nash by coarse correlation (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:bir:birmec:13-10

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