Affective Interdependence and Welfare

Aviad Heifetz (), Enrico Minelli and Herakles Polemarchakis ()
Additional contact information
Aviad Heifetz: The Open University of Israel, https://www.openu.ac.il/personal_sites/Aviad-Heifetz.html
Herakles Polemarchakis: University of Warwick, https://www.polemarchakis.org/

No 2360, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

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 Ònon- explosive mutual affection,Ó 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.

Pages: 23 pages
Date: 2023-04
New Economics Papers: this item is included in nep-gth and nep-mic
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Affective interdependence and welfare (2023)
Working Paper: Affective interdependence and welfare (2023)
Working Paper: Affective interdependence and welfare (2023)
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