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  • 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.

Last update from database: 9/7/24, 11:21 PM (AEST)

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