Improving Abatement Levels and Welfare by Coarse Correlation in an Environmental Game

Dokka Venkata Satyanaraya, Trivikram and Moulin, Herve and Ray, Indrajit and Sen Gupta, Sonali (2019) Improving Abatement Levels and Welfare by Coarse Correlation in an Environmental Game. Working Paper. Lancaster University, Department of Economics, Lancaster.

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Abstract

Coarse correlated equilibria (CCE, Moulin and Vial, 1978) can be used to substantially improve upon the Nash equilibrium solution of the well-analysed abatement game (Barrett, 1994). We show this by computing successively the CCE with the largest total utility, the one with the highest possible abatement levels and finally, the one with maximal abatement level while maintaining at least the level of utility from the Nash outcome.