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Affective Interdependence and Welfare

Author

Listed:
  • Aviad Heifetz

    (Open University of Israel)

  • Enrico Minelli

    (University of Brescia)

  • Herakles Polemarchakis

    (University of Warwick)

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 "non-explosive mutual affection," 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, 2026. "Affective Interdependence and Welfare," Cowles Foundation Discussion Papers 2360R1, Cowles Foundation for Research in Economics, Yale University.
    • Handle: RePEc:cwl:cwldpp:2360r1
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    File URL: https://cowles.yale.edu/sites/default/files/2026-02/d2360r1.pdf
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