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Games of Love and Hate

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  • 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
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    Cited by:

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

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