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Coarse Correlated Equilibria in an Abatement Game

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Author Info

  • Herve Moulin
  • Indrajit Ray
  • Sonali Sen Gupta

Abstract

We consider coarse correlated equilibria - CCE - (Moulin and Vial 1978) for the well-analyzed abatement game (Barrett 1994) and prove that CCE 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: it is achieved by a CCE involving only two pure strategy profiles, and the efficiency gain is small.

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File URL: ftp://ftp.bham.ac.uk/pub/RePEc/pdf/13-11.pdf
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Bibliographic Info

Paper provided by Department of Economics, University of Birmingham in its series Discussion Papers with number 13-11.

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Length: 14 pages
Date of creation: Apr 2013
Date of revision:
Handle: RePEc:bir:birmec:13-11

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Postal: Edgbaston, Birmingham, B15 2TT
Web page: http://www.economics.bham.ac.uk
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Keywords: Coarse correlated equilibrium; Abatement game;

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References

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  1. Indrajit Ray & Sonali Gupta, 2013. "Coarse correlated equilibria in linear duopoly games," International Journal of Game Theory, Springer, vol. 42(2), pages 541-562, May.
  2. Santiago J. Rubio & Alistair Ulph, 2006. "Self-enforcing international environmental agreements revisited," Oxford Economic Papers, Oxford University Press, vol. 58(2), pages 233-263, April.
  3. Liu, Luchuan, 1996. "Correlated Equilibrium of Cournot Oligopoly Competition," Journal of Economic Theory, Elsevier, vol. 68(2), pages 544-548, February.
  4. R. Aumann, 2010. "Correlated Equilibrium as an expression of Bayesian Rationality," Levine's Bibliography 513, UCLA Department of Economics.
  5. Sandeep Baliga & Eric Maskin, 2002. "Mechanism Design for the Environment," Economics Working Papers 0024, Institute for Advanced Study, School of Social Science.
  6. AUMANN, Robert J., . "Subjectivity and correlation in randomized strategies," CORE Discussion Papers RP -167, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  7. Moulin, Herve & Ray, Indrajit & Sen Gupta, Sonali, 2014. "Improving Nash by coarse correlation," Journal of Economic Theory, Elsevier, vol. 150(C), pages 852-865.
  8. Matthew McGinty, 2007. "International environmental agreements among asymmetric nations," Oxford Economic Papers, Oxford University Press, vol. 59(1), pages 45-62, January.
  9. Yi, Sang-Seung, 1997. "On the existence of a unique correlated equilibrium in Cournot oligopoly," Economics Letters, Elsevier, vol. 54(3), pages 235-239, July.
  10. Barrett, Scott, 1994. "Self-Enforcing International Environmental Agreements," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 878-94, Supplemen.
  11. Gerard-Varet, L. A. & Moulin, H., 1978. "Correlation and duopoly," Journal of Economic Theory, Elsevier, vol. 19(1), pages 123-149, October.
  12. Indrajit Ray & Sonali Sen Gupta, 2012. "Coarse Correlated Equilibria and Sunspots," Discussion Papers 11-14r, Department of Economics, University of Birmingham.
  13. Forgo, Ferenc & Fulop, Janos & Prill, Maria, 2005. "Game theoretic models for climate change negotiations," European Journal of Operational Research, Elsevier, vol. 160(1), pages 252-267, January.
  14. Young, H. Peyton, 2004. "Strategic Learning and its Limits," OUP Catalogue, Oxford University Press, number 9780199269181.
  15. Barrett, Scott, 2001. "International cooperation for sale," European Economic Review, Elsevier, vol. 45(10), pages 1835-1850, December.
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Cited by:
  1. Herve Moulin & Indrajit Ray & Sonali Sen Gupta, 2013. "Improving Nash by Coarse Correlation," Discussion Papers 13-10, Department of Economics, University of Birmingham.

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