Current Trends in Economics pp 141-156 | Cite as
On the connection between correlated equilibria and sunspot equilibria
Abstract
The conjecture stated in Maskin-Tirole (1987) about the existence of a close connection between correlated equilibria of market games modelling economies with asymmetric information about an extrinsic uncertainty and finite markovian stationary sunspot equilibria of related overlapping generations economies is reconsidered in this paper. It is shown that there is no robust example of an overlapping generations economy with a non-negligible set of finite markovian stationary sunspot equilibria which can be identified with correlated equilibria of the corresponding economy à la Maskin-Tirole, and vice versa. This result qualifies the conjectured connection between the two equilibrium concepts in these two frameworks.
JEL Classification Numbers
D52 E10Keywords
Correlated equilibrium sunspot equilibrium overlapping generations economyPreview
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