In game theory, a correlated equilibrium is a solution concept that is more general than the well known Nash equilibrium. It was first discussed by mathematician Robert Aumann (1974). The idea is that each player chooses his/her action according to his/her observation of the value of the same public signal. A strategy assigns an action to every possible observation a player can make. If no player would want to deviate from the recommended strategy (assuming the others don't deviate), the distribution is called a correlated equilibrium.
Read more about Correlated Equilibrium: Formal Definition, An Example, Learning Correlated Equilibria
Famous quotes containing the words correlated and/or equilibrium:
“...care and labor are as much correlated to human existence as shadow is to light ...”
—Harriet Beecher Stowe (1811–1896)
“They who feel cannot keep their minds in the equilibrium of a pair of scales: fear and hope have no equiponderant weights.”
—Horace Walpole (1717–1797)