Achieving Irrational Correlated Equilibria without Mediator

Abstract: This paper investigates the implementation and performance of a decentralized information transmission mechanism in complete information games. We propose a mediator-free mechanism that realizes mediator-free irrational correlated equilibria through a finite sequence of cheap talk. Designed for environments with at least five players, the mechanism leverages encryption techniques to safeguard private information and strategic choices. The core procedure involves three players decomposing and encrypting the equilibrium, while two other players securely randomize and deliver the encrypted recommendations to designated players. Our results demonstrate that all irrational correlated equilibria can be achieved through this mechanism, which is both strategically robust and practically implementable.