Why correlated equilibrium? Traffic Light Game theory Cross natural Stop -100 0 Cross -100 1 0 Stop 0 0 ■ 2 pure NE:one crosses and one stops.Payoff:(0,1)or(1,0) Bad:unfair. 1 mixed NE:both cross w.p.1/101. Good:Fair 口 Bad:Low payoff:both ~0.0001 Worse:Positive chance of crash CE:(Cross,Stop)w.p.1,(Stop,Cross)w.p.V Fair,high payoff,0 chance of crash.Why correlated equilibrium? Cross Stop Cross -100 -100 0 1 Stop 1 0 0 0 Game theory natural ◼ 2 pure NE: one crosses and one stops. Payoff: (0,1) or (1,0) ❑ Bad: unfair. ◼ 1 mixed NE: both cross w.p. 1/101. ❑ Good: Fair ❑ Bad: Low payoff: both ≃ 0.0001 ❑ Worse: Positive chance of crash ◼ CE: (Cross,Stop) w.p. ½, (Stop,Cross) w.p. ½ ❑ Fair, high payoff, 0 chance of crash. Traffic Light