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Correlated Equilibrium as an expression of Bayesian Rationality

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  • Robert J. Aumann
Abstract
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.
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Suggested Citation

  • Robert J. Aumann, 2010. "Correlated Equilibrium as an expression of Bayesian Rationality," Levine's Working Paper Archive 661465000000000377, David K. Levine.
    • Handle: RePEc:cla:levarc:661465000000000377
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