Correlation without Mediation: Expanding the Set of Equilibrium Outcomes by "Cheap" Pre-play Procedures

Elchanan Ben-Porath*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

39 Scopus citations

Abstract

LetPbe a correlated equilibrium distribution on the set of outcomes of a gameG. CanPbe implemented by some "cheap" pre-play procedure that does not involve a mediator? It is shown that if there are two distinct Nash equilibrium payoffs for each player inGand ifPis rational (that is, consists of probabilities which are rational numbers) and generates for each playerian expected payoff which is above her worst Nash equilibrium payoff, thenPcan be virtually implemented in a sequential equilibrium of an extended game which is generated by adding a "cheap" pre-play phase.Journal of EconomicLiterature Classification Number: C72.

Original languageEnglish
Pages (from-to)108-122
Number of pages15
JournalJournal of Economic Theory
Volume80
Issue number1
DOIs
StatePublished - May 1998
Externally publishedYes

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