A revelation principle for correlated equilibrium under trembling-hand perfection

• 成果类型: Article
• 署名作者: Luo, Xiao; Qiao, Yongchuan; Sun, Yang
• 署名单位: National University of Singapore; University of Electronic Science & Technology of China; Southwestern University of Finance & Economics - China
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2021.105396
• 发表日期: 2022
• 关键词: (Perfect) correlated equilibrium; revelation principle; CEMDT; ACE; Admissibility

摘要

Dhillon and Mertens (1996) introduce the concept of perfect correlated equilibrium (PCE) and show, using an example, that the revelation principle fails for PCE -that is, a PCE distribution may not be generated by the canonical mechanism. This failure of the revelation principle jeopardizes its applications in economics. In this paper, we show that the revelation principle holds for an alternative notion of perfect correlated equilibrium that we dub correlated equilibrium with message-dependent trembles (CEMDT). The notion of CEMDT is fully characterized by undominated correlated equilibria that involve admissible actions only. Moreover, any CEMDT distribution can be represented by an incentive-compatible direct-revelation mechanism; the set of CEMDT distributions is a convex polyhedron that contains all perfect equilibria. Our paper thus provides a strategic foundation for undominated correlated equilibrium. We also show that the CEMDT distribution is equivalent to a weak version of acceptable correlated equilibrium (ACE) as in Myerson (1986a) (and equivalent to ACE in two-person games). (c) 2021 Elsevier Inc. All rights reserved.