Bayes Correlated Equilibrium and the Comparison of Information Structures

90 Pages Posted: 19 Sep 2013

See all articles by Dirk Bergemann

Dirk Bergemann

Yale University - Cowles Foundation - Department of Economics; Yale University - Cowles Foundation

Stephen Morris

Princeton University - Department of Economics

Date Written: February 17, 2013

Abstract

The set of outcomes that can arise in Bayes Nash equilibria of an incomplete information game where players may or may not have access to more private information is characterized and shown to be equivalent to the set of an incomplete information version of correlated equilibrium, which we call Bayes correlated equilibrium. We describe a partial order on many player information structures — which we call individual sufficiency — under which more information shrinks the set of Bayes correlated equilibria. We discuss the relation of the solution concept to alternative definitions of correlated equilibrium in incomplete information games and of the partial order on information structures to others, including Blackwell's for the single player case.

Keywords: Correlated equilibrium, Incomplete information, Robust predictions, Information structure

JEL Classification: C72, D82, D83

Suggested Citation

Bergemann, Dirk and Morris, Stephen Edward, Bayes Correlated Equilibrium and the Comparison of Information Structures (February 17, 2013). Cowles Foundation Discussion Paper No. 1822R. Available at SSRN: https://ssrn.com/abstract=2327072 or http://dx.doi.org/10.2139/ssrn.2327072

Dirk Bergemann (Contact Author)

Yale University - Cowles Foundation - Department of Economics ( email )

28 Hillhouse Ave
New Haven, CT 06520-8268
United States
203-432-3592 (Phone)
203-432-2128 (Fax)

HOME PAGE: http://www.econ.yale.edu/~dirk/

Yale University - Cowles Foundation

Box 208281
New Haven, CT 06520-8281
United States

Stephen Edward Morris

Princeton University - Department of Economics ( email )

Princeton, NJ 08544-1021
United States

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