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A difficulty in implementing correlated equilibrium distributions

https://doi.org/10.1016/j.geb.2008.11.006Get rights and content

Abstract

We view achieving a particular correlated equilibrium distribution for a normal form game as an implementation problem. We show, using a parametric version of the two-person Chicken game, that a social choice function that chooses any particular correlated equilibrium distribution does not satisfy Maskin monotonicity and therefore cannot be fully implemented in Nash equilibrium. Thus, no mechanism that aims to understand a correlated distribution as the unique outcome of Nash equilibrium play can be found.

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  • Cited by (6)

    We are indebted to Francoise Forges, Chirantan Ganguly, Dino Gerardi, and especially Rajiv Vohra for their helpful comments. We also thank two anonymous referees and the editor-in-charge for their constructive criticisms. Work on this paper began while Ray was visiting Brown University. Serrano gratefully acknowledges Universidad Carlos III and CEMFI in Madrid for their hospitality, and Fundacion Banco Herrero and Universidad Carlos III for research support.

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