Utilitarian Preferences and Potential Games
AbstractWe study games with utilitarian preferences: the sum of individual utility functions is a generalized ordinal potential for the game. It turns out that generically, any finite game with a potential, ordinal potential, or generalized ordinal potential is better reply equivalent to a game with utilitarian preferences. It follows that generically, finite games with a generalized ordinal potential are better reply equivalent to potential games. For infinite games we show that a continuous game has a continuous ordinal potential, iff there is a better reply equivalent continuous game with utilitarian preferences. For such games we show that best reply improvement paths can be used to approximate equilibria arbitrarily closely.
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Bibliographic InfoPaper provided by Aboa Centre for Economics in its series Discussion Papers with number 85.
Date of creation: May 2013
Date of revision:
potential games; best reply equivalence; utilitarian preferences;
Find related papers by JEL classification:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-06-04 (All new papers)
- NEP-GTH-2013-06-04 (Game Theory)
- NEP-HPE-2013-06-04 (History & Philosophy of Economics)
- NEP-MIC-2013-06-04 (Microeconomics)
- NEP-UPT-2013-06-04 (Utility Models & Prospect Theory)
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