Equilibrium Design by Coarse Correlation in Quadratic Games

Dokka Venkata Satyanaraya, Trivikram and Moulin, Herve and Ray, Indrajit and Sen Gupta, Sonali (2020) Equilibrium Design by Coarse Correlation in Quadratic Games. Working Paper. Lancaster University, Department of Economics, Lancaster.

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Abstract

In a public good provision or a public bad abatement situation, the non-cooperative interplay of the participants typically results in low levels of provision or abatement. In the familiar class of n-person quadratic games, we show that Coarse Correlated equilibria (CCEs) - simple mediated communication devices that do not alter the strategic structure of the game - can significantly outperform the Nash equilibrium in terms of the policy objective above.