Moulin, Herve; Ray, Indrajit; Sen Gupta, Sonali - Economics Section, Cardiff Business School - 2014
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...