Efficiency in Correlated Equilibrium

Indrajit Ray ()

No 1995018, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: We analyze all the existing efficiency criteria of mechanism design literature in the context of correlated equilibrium: ex-post (classical) efficiency, strong interim efficiency, weak interim (incentive) efficiency, posterior (informational) efficiency. The natural criterion of interior efficiency is introduced where obedience is not only Nash equilibrium but also Pareto efficient among the set of Nash equilibria in the induced extended game. All of these sets are compared to each other, analyzing several examples; the issue of (non)existence is also discussed. We characterize our efficient subsets of the set of correlated equilibria in terms of the existing notions of coalitionproofness in this context and show for two person games some notion of efficiency is the necessary and sufficient condition for the (corresponding) coalition-proofness. We discuss our concepts in non-canonical correlated devices also and prove the revelation principle in the context of ex-post, strong and weak interim efficiency, though it fails, even for two-player games, in the context of posterior and interior efficiency.

JEL-codes: C72 (search for similar items in EconPapers)
Date: 1995-03-01
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Related works:
Journal Article: Efficiency in correlated equilibrium (1996)
Working Paper: Efficiency in correlated equilibrium (1996)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:1995018

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