IDEAS home Printed from https://ideas.repec.org/a/ucp/jpolec/doi10.1086-705552.html
   My bibliography  Save this article

Games of Love and Hate

Author

Listed:
  • Debraj Ray
  • Rajiv Vohra

Abstract

A strategic situation with payoff-based externalities is one in which a player’s payoff depends on her own action and others’ payoffs. We place restrictions on the resulting interdependent utility system that generate a standard normal form, referred to as a “game of love and hate.” Our central theorem states that every equilibrium of a game of love and hate is Pareto optimal. While externalities are restricted to flow only through payoffs, there are no other constraints: they could be positive or negative or of varying sign. We examine the philosophical implications of the restrictions that underlie this theorem.

Suggested Citation

  • Debraj Ray & Rajiv Vohra, 2020. "Games of Love and Hate," Journal of Political Economy, University of Chicago Press, vol. 128(5), pages 1789-1825.
    • Handle: RePEc:ucp:jpolec:doi:10.1086/705552
    DOI: 10.1086/705552
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1086/705552
    Download Restriction: Access to the online full text or PDF requires a subscription.
    File URL: http://dx.doi.org/10.1086/705552
    Download Restriction: Access to the online full text or PDF requires a subscription.
    File URL: https://libkey.io/10.1086/705552?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Bergstrom, Theodore C., 1970. "A "Scandinavian consensus" solution for efficient income distribution among nonmalevolent consumers," Journal of Economic Theory, Elsevier, vol. 2(4), pages 383-398, December.
    2. Debraj Ray & Arthur Robson, 2018. "Certified Random: A New Order for Coauthorship," American Economic Review, American Economic Association, vol. 108(2), pages 489-520, February.
    3. Murphy, Kevin M & Shleifer, Andrei & Vishny, Robert W, 1989. "Industrialization and the Big Push," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1003-1026, October.
    4. Theodore C. Bergstrom, 1999. "Systems of Benevolent Utility Functions," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 1(1), pages 71-100, January.
    5. Hori, Hajime & Kanaya, Sadao, 1989. "Utility functionals with nonpaternalistic intergenerational altruism," Journal of Economic Theory, Elsevier, vol. 49(2), pages 241-265, December.
    6. Rader, Trout, 1980. "The second theorem of welfare economics when utilities are interdependent," Journal of Economic Theory, Elsevier, vol. 23(3), pages 420-424, December.
    7. Osana, Hiroaki, 1972. "Externalities and the basic theorems of welfare economics," Journal of Economic Theory, Elsevier, vol. 4(3), pages 401-414, June.
    8. Sen, Amartya, 1970. "The Impossibility of a Paretian Liberal," Journal of Political Economy, University of Chicago Press, vol. 78(1), pages 152-157, Jan.-Feb..
    9. Ray, Debraj, 1987. "Nonpaternalistic intergenerational altruism," Journal of Economic Theory, Elsevier, vol. 41(1), pages 112-132, February.
    10. Parks, Robert P., 1991. "Pareto irrelevant externalities," Journal of Economic Theory, Elsevier, vol. 54(1), pages 165-179, June.
    11. Matthew O. Jackson & Andrew McLennan (ed.), 2008. "Foundations in Microeconomic Theory," Springer Books, Springer, number 978-3-540-74057-5, December.
    12. Ledyard, John O., 1971. "The relation of optima and market equilibria with externalities," Journal of Economic Theory, Elsevier, vol. 3(1), pages 54-65, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Aviad Heifetz & Enrico Minelli & Herakles Polemarchakis, 2023. "Affective Interdependence and Welfare," Cowles Foundation Discussion Papers 2360, Cowles Foundation for Research in Economics, Yale University.
    2. Jorge Vasquez & Marek Weretka, 2020. "Co-worker altruism and unemployment," GRAPE Working Papers 55, GRAPE Group for Research in Applied Economics.
    3. Bramoullé, Yann & ,, 2022. "Altruism Networks, Income Inequality, and Economic Relations," CEPR Discussion Papers 17000, C.E.P.R. Discussion Papers.
    4. Vásquez, Jorge & Weretka, Marek, 2021. "Co-worker altruism and unemployment," Games and Economic Behavior, Elsevier, vol. 130(C), pages 224-239.
    5. Jay Simon & Donald Saari & Donald Saari, 2020. "Interdependent Altruistic Preference Models," Decision Analysis, INFORMS, vol. 17(3), pages 189-207, September.
    6. Heifetz, Aviad, 2023. "The non-dismal science of intergenerational affective interactions," Games and Economic Behavior, Elsevier, vol. 140(C), pages 575-584.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Antony Millner, 2016. "Heterogeneous intergenerational altruism," GRI Working Papers 226, Grantham Research Institute on Climate Change and the Environment.
    2. Jay Simon, 2016. "On the existence of altruistic value and utility functions," Theory and Decision, Springer, vol. 81(3), pages 371-391, September.
    3. Fong Yuk-Fai, 2009. "Private Information of Nonpaternalistic Altruism: Exaggeration and Reciprocation of Generosity," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 9(1), pages 1-32, January.
    4. Balbus, Łukasz & Jaśkiewicz, Anna & Nowak, Andrzej S., 2016. "Non-paternalistic intergenerational altruism revisited," Journal of Mathematical Economics, Elsevier, vol. 63(C), pages 27-33.
    5. Gonzalez, Francisco M. & Lazkano, Itziar & Smulders, Sjak A., 2018. "Intergenerational altruism with future bias," Journal of Economic Theory, Elsevier, vol. 178(C), pages 436-454.
    6. Francisco M. Gonzalez & Itziar Lazkano & Sjak A. Smulders, 2017. "Future-biased Intergenerational Altruism," Working Papers 1703, University of Waterloo, Department of Economics, revised Apr 2017.
    7. del Mercato, Elena L. & Nguyen, Van-Quy, 2023. "Sufficient conditions for a “simple” decentralization with consumption externalities," Journal of Economic Theory, Elsevier, vol. 209(C).
    8. Stanley Reiter, 2001. "Interdependent Preferences and Groups of Agents," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 3(1), pages 27-67, January.
    9. Jean Mercier-Ythier, 2010. "The Aggregation of Individual Distributive Preferences through the Distributive Liberal Social Contract : Normative Analysis," Working Papers of BETA 2010-01, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    10. Botond Kőszegi, 2010. "Utility from anticipation and personal equilibrium," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 44(3), pages 415-444, September.
    11. Hori, Hajime, 1997. "Dynamic Allocation in an Altruistic Overlapping Generations Economy," Journal of Economic Theory, Elsevier, vol. 73(2), pages 292-315, April.
    12. Jorge Vasquez & Marek Weretka, 2020. "Co-worker altruism and unemployment," GRAPE Working Papers 55, GRAPE Group for Research in Applied Economics.
    13. Pascal Courty & Merwan Engineer, 2019. "A pure hedonic theory of utility and status: Unhappy but efficient invidious comparisons," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 21(4), pages 601-621, August.
    14. Ythier, Jean Mercier, 1998. "The distribution of wealth in the liberal social contract," European Economic Review, Elsevier, vol. 42(2), pages 329-347, February.
    15. Łukasz Balbus & Anna Jaśkiewicz & Andrzej S. Nowak, 2020. "Equilibria in Altruistic Economic Growth Models," Dynamic Games and Applications, Springer, vol. 10(1), pages 1-18, March.
    16. W D A Bryant, 2009. "General Equilibrium:Theory and Evidence," World Scientific Books, World Scientific Publishing Co. Pte. Ltd., number 6875, January.
    17. Christian Morrisson & Philippe Cazenave, 1972. "Fonctions d'utilité interdépendantes et théorie de la redistribution en économie d'échange," Revue Économique, Programme National Persée, vol. 23(2), pages 214-242.
    18. Wolff, Francois-Charles & Laferrere, Anne, 2006. "Microeconomic models of family transfers," Handbook on the Economics of Giving, Reciprocity and Altruism, in: S. Kolm & Jean Mercier Ythier (ed.), Handbook of the Economics of Giving, Altruism and Reciprocity, edition 1, volume 1, chapter 13, pages 889-969, Elsevier.
    19. Nesje, Frikk, 2020. "Cross-dynastic Intergenerational Altruism," Working Papers 0678, University of Heidelberg, Department of Economics.
    20. Hikaru Ogawa & David E. Wildasin, 2009. "Think Locally, Act Locally: Spillovers, Spillbacks, and Efficient Decentralized Policymaking," American Economic Review, American Economic Association, vol. 99(4), pages 1206-1217, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucp:jpolec:doi:10.1086/705552. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Journals Division (email available below). General contact details of provider: https://www.journals.uchicago.edu/JPE .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.