A Note on Intrinsic Correlation

Songzi Du

MPRA Paper from University Library of Munich, Germany

Abstract: In this note we characterize the strategic implication of intrinsic correlation, introduced by Brandenburger and Friedenberg (2008), in the subjective correlated equilibrium setting of a complete information game. Intrinsic correlation restricts correlation devices to variables within the game, i.e. players's beliefs (and higher order beliefs) about each other's strategies, in contrast to signals or sunspots from the "outside." The characterization is a strengthening of best-response set with an injectivity condition for a certain subset identified by an iterative procedure. We also give an iterative procedure, analogous to the iterated removals of dominated strategies, that arrives at strategies consistent with our characterization, which always exist.

Keywords: game theory; correlated equilibrium; rationalizability; intrinsic correlation; higher order beliefs; redundant types; epistemics (search for similar items in EconPapers)
JEL-codes: C70 C72 (search for similar items in EconPapers)
Date: 2008-12-08, Revised 2009-01-12
New Economics Papers: this item is included in nep-gth
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