Utilitarian Preferences and Potential Games

Hannu Salonen

No 85, Discussion Papers from Aboa Centre for Economics

Abstract: We 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.

Keywords: potential games; best reply equivalence; utilitarian preferences (search for similar items in EconPapers)
JEL-codes: C72 D43 (search for similar items in EconPapers)
Pages: 19
Date: 2013-05
New Economics Papers: this item is included in nep-gth, nep-hpe, nep-mic and nep-upt
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