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Coarse Correlated Equilibria in an Abatement Game

Author

Listed:
  • 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.

Suggested Citation

  • Herve Moulin & Indrajit Ray & Sonali Sen Gupta, 2013. "Coarse Correlated Equilibria in an Abatement Game," Discussion Papers 13-11, Department of Economics, University of Birmingham.
  • Handle: RePEc:bir:birmec:13-11
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    References listed on IDEAS

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    Cited by:

    1. Ferenc Forgó, 2020. "Exact enforcement value of soft correlated equilibrium for generalized chicken and prisoner’s dilemma games," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 28(1), pages 209-227, March.
    2. Moulin, Herve & Ray, Indrajit & Sen Gupta, Sonali, 2014. "Improving Nash by coarse correlation," Journal of Economic Theory, Elsevier, vol. 150(C), pages 852-865.
    3. Arsen Palestini & Ilaria Poggio, 2015. "A Bayesian potential game to illustrate heterogeneity in cost/benefit characteristics," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 62(1), pages 23-39, March.

    More about this item

    Keywords

    Coarse correlated equilibrium; Abatement game;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects

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