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.
I thank Eric Maskin, Piero Gottardi, James Borgin, Karl Shell and James Peck for their remarks and discussions on this subject, and Andren Mas-Colell for useful comments. This research was started while visiting Harvard University as Post-doctoral Fellow and has since then benefited from remarks from attendants at several conferences and seminars. Funding from the Spanish Ministry of Education and Science from the research projects PB92-0120-C02-091, PB96-1160-C02-02 and a post-doctoral fellowship is gratefully acknowledged.
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© 1999 Springer-Verlag Berlin Heidelberg
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Dávila, J. (1999). On the connection between correlated equilibria and sunspot equilibria. In: Alkan, A., Aliprantis, C.D., Yannelis, N.C. (eds) Current Trends in Economics. Studies in Economic Theory, vol 8. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-03750-8_9
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DOI: https://doi.org/10.1007/978-3-662-03750-8_9
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