Coarse Correlated Equilibria in an Abatement Game

Herve Moulin, Indrajit Ray () and Sonali Sen Gupta

No E2014/24, Cardiff Economics Working Papers from Cardiff University, Cardiff Business School, Economics Section

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.

Keywords: Abatement game; Coarse correlated equilibrium; Efficiency gain (search for similar items in EconPapers)
JEL-codes: C72 Q52 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2014-12
New Economics Papers: this item is included in nep-gth, nep-hpe and nep-mic
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Related works:
Working Paper: Coarse correlated equilibria in an abatement game (2014)
Working Paper: Coarse Correlated Equilibria in an Abatement Game (2013)
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