Affective interdependence and welfare

Aviad Heifetz, Enrico Minelli and Herakles Polemarchakis
Additional contact information
Aviad Heifetz: Open University Tel Aviv
Herakles Polemarchakis: University of Warwick

The Warwick Economics Research Paper Series (TWERPS) from University of Warwick, Department of Economics

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 nonexplosive 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 dominan

Keywords: purely affective interactions; Pareto optimality JEL codes: D62 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-mic
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Citations: View citations in EconPapers (1)

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https://warwick.ac.uk/fac/soc/economics/research/w ... _-_polemarchakis.pdf

Related works:
Working Paper: Affective interdependence and welfare (2023)
Working Paper: Affective Interdependence and Welfare (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:wrk:warwec:1450

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