Bayes Correlated Equilibrium and the Comparison of Information Structures in Games
41 Pages Posted: 23 Oct 2014
Date Written: October 22, 2014
The set of outcomes that can arise in Bayes Nash equilibria of an incomplete information game where players may have access to additional signals beyond the given information structure is equivalent to the set of a version of incomplete information correlated equilibrium which we dub Bayes correlated equilibrium.
A game of incomplete information can be decomposed into a basic game, given by actions sets and payoff functions, and an information structure. We identify a partial order on many player information structures (individual sufficiency) under which more information shrinks the set of Bayes correlated equilibria.
Keywords: Correlated equilibrium, Incomplete information, Robust predictions, Information structure, Sufficiency, Blackwell ordering
JEL Classification: C72, D82, D83
Suggested Citation: Suggested Citation