Correlated equilibrium

Correlated equilibrium is a concept in game theory that extends the idea of Nash equilibrium. It was introduced by Robert Aumann in the 1970s. The key idea behind correlated equilibrium is that players can achieve better outcomes by coordinating their strategies based on some form of common signal or correlation, rather than choosing their strategies independently. ### Definition: In a correlated equilibrium, a mediator (or correlation device) sends signals to the players, suggesting which strategies they should play.