CFDP 1822R

Bayes Correlated Equilibrium and the Comparison of Information Structures

Author(s): 

Publication Date: October 2011

Revision Date: February 2013

Pages: 89

Abstract: 

The set of outcomes that can arise in Bayes Nash equilibria of an incomplete information game where players may or may not have access to more private information is characterized and shown to be equivalent to the set of an incomplete information version of correlated equilibrium, which we call Bayes correlated equilibrium. We describe a partial order on many player information structures — which we call individual sufficiency — under which more information shrinks the set of Bayes correlated equilibria. We discuss the relation of the solution concept to alternative definitions of correlated equilibrium in incomplete information games and of the partial order on information structures to others, including Blackwell’s for the single player case.

Keywords: 

Correlated equilibrium, Incomplete information, Robust predictions, Information structure

JEL Classification Codes:  C72, D82, D83