Game Theory Questions
Correlated equilibrium is a concept in game theory that extends the notion of Nash equilibrium by allowing players to use randomization or communication to coordinate their strategies. In a correlated equilibrium, players receive a recommendation or a signal from a trusted mediator, which suggests a strategy profile for each player. Each player then follows the recommended strategy, ensuring that no player has an incentive to deviate from it unilaterally. This concept allows for more efficient outcomes compared to Nash equilibrium in certain situations where coordination is beneficial.