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On the Strategic Advantage of Negatively Interdependent Preferences

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Author Info
Levent Kockesen (New York University)
Efe A. Ok (New York University)
Rajiv Sethi (Barnard College, Columbia University)

Additional information is available for the following registered author(s):

Abstract

We study certain classes of supermodular and submodular games which are symmetric with respect to material payoffs but in which not all players seek to maximize their material payoffs. Specifically, a subset of players have negatively interdependent preferences and care not only about their own material payoffs but also about their payoffs relative to others. We identify sufficient conditions under which members of the latter group have a strategic advantage in the following sense: at all intragroup symmetric equilibria of the game, they earn strictly higher material payoffs than do players who seek to maximize their material payoffs. We show that these conditions are satisfied by a number of games of economic importance, and discuss the implications of these findings for the evolutionary theory of preference formation and the theory of Cournot competition.

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File URL: http://129.3.20.41/eps/game/papers/9708/9708001.pdf
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Publisher Info
Paper provided by EconWPA in its series Game Theory and Information with number 9708001.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 34 pages
Date of creation: 04 Aug 1997
Date of revision: 08 Aug 1997
Handle: RePEc:wpa:wuwpga:9708001

Note: Type of Document - Acrobat PDF; prepared on IBM PC ; to print on HP; pages: 34 ; figures: None
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Web page: http://129.3.20.41

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Related research
Keywords: Interdependent Preferences; Submodular and Supermodular Games; Relative Profits; Cournot Oligopoly;

Find related papers by JEL classification:
C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
D62 - Microeconomics - - Welfare Economics - - - Externalities

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

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    Other versions:
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  8. Kockesen, Levent & Ok, Efe A., 1997. "Negatively Interdependent Preferences," Working Papers 97-02, C.V. Starr Center for Applied Economics, New York University. [Downloadable!]
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  14. Nishimura, Kazuo & Friedman, James, 1981. "Existence of Nash Equilibrium in n Person Games without Quasi-Concavity," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 22(3), pages 637-48, October. [Downloadable!] (restricted)
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  18. Dasgupta, Partha & Maskin, Eric, 1986. "The Existence of Equilibrium in Discontinuous Economic Games, I: Theory," Review of Economic Studies, Blackwell Publishing, vol. 53(1), pages 1-26, January. [Downloadable!] (restricted)
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  20. Levent Kockesen & Efe A. Ok & Rajiv Sethi, 1997. "Interdependent Preference Formation," Game Theory and Information 9708002, EconWPA. [Downloadable!]
    Other versions:
  21. Bengt Holmstrom, 1982. "Moral Hazard in Teams," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 324-340, Autumn. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Kockesen, L. & Ok, E.A. & Sethi, R., 1998. "Evolution of Interdependent Preferences in Aggregative Games," Working Papers 98-19, C.V. Starr Center for Applied Economics, New York University. [Downloadable!]
    Other versions:
  2. Possajennikov, A., 1999. "On evolutionary stability of spiteful preferences," Discussion Paper 56, Tilburg University, Center for Economic Research. [Downloadable!]
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