Correlated Equilibrium as an Expression of Bayesian Rationality Author ( s )

If it is common knowledge that the players in a game are Bayesian utility maximizers who treat uncertainty about other players' actions like any other uncertainty, then the outcome is necessarily a correlated equilibrium. Random strategies appear as an expression of each player's uncertainty about what the others will do, not as the result of willful randomization. Use is made of the common prior assumption, according to which differences in probability assessments by different individuals are due to the different information that they have (where "information" may be interpreted broadly, to include experience, upbringing, and genetic makeup). Copyright 1987 by The Econometric Society.

[1]  E. Rowland Theory of Games and Economic Behavior , 1946, Nature.

[2]  J. Harsanyi Games with Incomplete Information Played by 'Bayesian' Players, Part III. The Basic Probability Distribution of the Game , 1968 .

[3]  J. Harsanyi Games with randomly disturbed payoffs: A new rationale for mixed-strategy equilibrium points , 1973 .

[4]  R. Aumann Subjectivity and Correlation in Randomized Strategies , 1974 .

[5]  R. Selten Reexamination of the perfectness concept for equilibrium points in extensive games , 1975, Classics in Game Theory.

[6]  J. Vial,et al.  Strategically zero-sum games: The class of games whose completely mixed equilibria cannot be improved upon , 1978 .

[7]  R. Myerson Refinements of the Nash equilibrium concept , 1978 .

[8]  David M. Kreps,et al.  Speculative Investor Behavior in a Stock Market with Heterogeneous Expectations , 1978 .

[9]  Robert J. Aumann,et al.  Essays in game theory and mathematical economics in honor of Oskar Morgenstern , 1981 .

[10]  Patrick D. Larkey,et al.  Subjective Probability and the Theory of Games , 1982 .

[11]  B. Bernheim Rationalizable Strategic Behavior , 1984 .

[12]  E. Kalai,et al.  Persistent equilibria in strategic games , 1984 .

[13]  David Pearce Rationalizable Strategic Behavior and the Problem of Perfection , 1984 .

[14]  S. Zamir,et al.  Formulation of Bayesian analysis for games with incomplete information , 1985 .

[15]  J. Mertens,et al.  ON THE STRATEGIC STABILITY OF EQUILIBRIA , 1986 .