IDEAS home Printed from https://ideas.repec.org/p/cwl/cwldpp/2360.html
   My bibliography  Save this paper

Affective Interdependence and Welfare

Author

Listed:

Abstract

Purely affective interaction allows the welfare of an individual to depend on her own actions and on the profile of welfare levels of others. Under an assumption on the structure of mutual affection that we interpret as Ònon- explosive mutual affection,Ó we show that equilibria of simultaneous-move affective interaction are Pareto optimal independently of whether or not an induced standard game exists. Moreover, if purely affective interaction induces a standard game, then an equilibrium profile of actions is a Nash equilibrium of the game, and this Nash equilibrium and Pareto optimal profile of strategies is locally dominant.

Suggested Citation

  • Aviad Heifetz & Enrico Minelli & Herakles Polemarchakis, 2023. "Affective Interdependence and Welfare," Cowles Foundation Discussion Papers 2360, Cowles Foundation for Research in Economics, Yale University.
    • Handle: RePEc:cwl:cwldpp:2360
    as

    Download full text from publisher

    File URL: https://cowles.yale.edu/sites/default/files/2023-05/d2360.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Oded Galor, 1996. "Discrete Dynamical Systems," Working Papers 96-23, Brown University, Department of Economics.
    2. Martin Dufwenberg & Paul Heidhues & Georg Kirchsteiger & Frank Riedel & Joel Sobel, 2011. "Other-Regarding Preferences in General Equilibrium," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 78(2), pages 613-639.
    3. Oded Galor, 2007. "Discrete Dynamical Systems," Springer Books, Springer, edition 1, number 978-3-540-36776-5, September.
    4. Bergstrom, Ted, 1989. "Love and Spaghetti, the Opportunity Cost of Virtue," Journal of Economic Perspectives, American Economic Association, vol. 3(2), pages 165-173, Spring.
    5. Pradeep Dubey, 1986. "Inefficiency of Nash Equilibria," Mathematics of Operations Research, INFORMS, vol. 11(1), pages 1-8, February.
    6. Winter, Sidney Jr., 1969. "A simple remark on the second optimality theorem of welfare economics," Journal of Economic Theory, Elsevier, vol. 1(1), pages 99-103, June.
    7. Debraj Ray & Rajiv Vohra, 2020. "Games of Love and Hate," Journal of Political Economy, University of Chicago Press, vol. 128(5), pages 1789-1825.
    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. 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. 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).
    2. Strulik, Holger & Werner, Katharina, 2014. "Elite education, mass education, and the transition to modern growth," University of Göttingen Working Papers in Economics 205, University of Goettingen, Department of Economics.
    3. Carl-Johan Dalgaard & Holger Strulik, 2015. "The physiological foundations of the wealth of nations," Journal of Economic Growth, Springer, vol. 20(1), pages 37-73, March.
    4. Hiroaki Kaido & Kaspar Wüthrich, 2021. "Decentralization estimators for instrumental variable quantile regression models," Quantitative Economics, Econometric Society, vol. 12(2), pages 443-475, May.
    5. Solomon Sorin & Golo Natasa, 2013. "Minsky Financial Instability, Interscale Feedback, Percolation and Marshall–Walras Disequilibrium," Accounting, Economics, and Law: A Convivium, De Gruyter, vol. 3(3), pages 167-260, October.
    6. M. Lombardi & S. Tonin, 2020. "On trade in bilateral oligopolies with altruistic and spiteful agents," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 8(2), pages 203-218, October.
    7. Battigalli, Pierpaolo & Panebianco, Fabrizio & Pin, Paolo, 2023. "Learning and selfconfirming equilibria in network games," Journal of Economic Theory, Elsevier, vol. 212(C).
    8. de Oliveira, Juliano A. & N. Ramos, Larissa C. & Leonel, Edson D., 2018. "Dynamics towards the steady state applied for the Smith-Slatkin mapping," Chaos, Solitons & Fractals, Elsevier, vol. 108(C), pages 119-122.
    9. Donal Smith, 2015. "Collateral Constraints and the Interest Rate," Discussion Papers 15/22, Department of Economics, University of York.
    10. Lindner, Ines & Strulik, Holger, 2014. "From tradition to modernity: Economic growth in a small world," Journal of Development Economics, Elsevier, vol. 109(C), pages 17-29.
    11. Kalin Hristov & Rossen Rozenov, 2009. "Financial Convergence in the New EU Member States," Working Paper / FINESS 1.2, DIW Berlin, German Institute for Economic Research.
    12. Jin, Wen-Long, 2013. "Stability and bifurcation in network traffic flow: A Poincaré map approach," Transportation Research Part B: Methodological, Elsevier, vol. 57(C), pages 191-208.
    13. Andreas Irmen, 2017. "Capital‐ And Labor‐Saving Technical Change In An Aging Economy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 58(1), pages 261-285, February.
    14. Kuhle, Wolfgang, 2021. "Equilibrium with computationally constrained agents," Mathematical Social Sciences, Elsevier, vol. 109(C), pages 77-92.
    15. Luis Alcalá & Fernando Tohmé & Carlos Dabús, 2019. "Strategic Growth with Recursive Preferences: Decreasing Marginal Impatience," Dynamic Games and Applications, Springer, vol. 9(2), pages 314-365, June.
    16. 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.
    17. Iong, Ka-Kit & Irmen, Andreas, 2021. "The supply of hours worked and fluctuations between growth regimes," Journal of Economic Theory, Elsevier, vol. 194(C).
    18. Mullon, Charles & Peña, Jorge & Lehmann, Laurent, 2023. "Evolution of environmentally mediated social interactions under isolation by distance," TSE Working Papers 23-1476, Toulouse School of Economics (TSE).
    19. Galor, Oded & Ashraf, Quamrul, 2007. "Cultural Assimilation, Cultural Diffusion and the Origin of the Wealth of Nations," CEPR Discussion Papers 6444, C.E.P.R. Discussion Papers.
    20. Jin, Wen-Long, 2017. "On the stability of stationary states in general road networks," Transportation Research Part B: Methodological, Elsevier, vol. 98(C), pages 42-61.

    More about this item

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:cwl:cwldpp:2360. 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: Brittany Ladd (email available below). General contact details of provider: https://edirc.repec.org/data/cowleus.html .

    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.