Rational Altruism

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1 Scopus citations

Abstract

This article proposes a game-theoretic equilibrium concept promoting endogenous cooperation through self-interested agents optimally choosing how much they care about their opponents’ welfare. Rationally altruistic equilibria always exist in finite games as long as a publicly observed signal is available. Characterizations of the equilibrium concept highlight that it is most likely to have a bite when players’ interests are sufficiently dissimilar but not diametrically opposed to each other—such as in the prisoner's dilemma. In the presence of more than two players, rational altruism can take an opportunistic form and serve as a device of collusion through implicit coalition formation.

Original languageEnglish (US)
Pages (from-to)50-80
Number of pages31
JournalJournal of Economic Behavior and Organization
Volume207
DOIs
StatePublished - Mar 2023
Externally publishedYes

Keywords

  • Altruism
  • Collusion
  • Coordination
  • Efficiency
  • Nash equilibrium

ASJC Scopus subject areas

  • Economics and Econometrics
  • Organizational Behavior and Human Resource Management

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