A correlated equilibrium for a normal form game is a mediator whose recommendations the players find optimal to follow obediently. A (direct) correlation device or a mediator however may face the multiple equilibrium problem as the obedient strategy profile may be dominated by some other Nash...

We consider the well-analyzed abatement game (Barrett 1994) and prove that correlation among the players (nations) can strictly improve upon the Nash equilibrium payoffs. As these games are potential games, correlated equilibrium - CE - (Aumann 1974, 1987) cannot improve upon Nash; however we...

We consider the set-up of a Japanese-English auction with exogenously fixed discrete bid levels for the wallet game with two bidders. We prove that bidding twice the signal - the equilibrium strategy with continuous bid levels - is never an equilibrium in this set up. We show that partition...