Abstract:

The ( epsilon )-perfect correlated equilibria (PCE) are those induced by a ( epsilon )-perfect equilibrium of some correlation device. The "revelation principle" fails for this concept-the direct mechanism may not yield a perfect equilibrium. The approximately perfect correlated equilibria (APCE) are the limits of epsilon -PCE, and we obtain a full characterisation for them. Even the APCE are "acceptable." We argue in an example that, among those, it is the PCE which seem the "right" concept. Journal of Economic Literature Classification Number: C72.

Language: English

Document Type: Research article

Affiliations: CORE, Universite Catholique de Louvain, Louvain-la-Neuve, Belgium: