Rational Altruism

Áron Tóbiás

doi:10.1016/j.jebo.2023.01.003

Rational Altruism

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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 language	English (US)
Pages (from-to)	50-80
Number of pages	31
Journal	Journal of Economic Behavior and Organization
Volume	207
DOIs	https://doi.org/10.1016/j.jebo.2023.01.003
State	Published - Mar 2023
Externally published	Yes

Keywords

Altruism
Collusion
Coordination
Efficiency
Nash equilibrium

ASJC Scopus subject areas

Economics and Econometrics
Organizational Behavior and Human Resource Management

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10.1016/j.jebo.2023.01.003

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title = "Rational Altruism",

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{\textquoteright} 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{\textquoteright} 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.",

keywords = "Altruism, Collusion, Coordination, Efficiency, Nash equilibrium",

author = "{\'A}ron T{\'o}bi{\'a}s",

note = "Funding Information: I am very grateful to Ariel Rubinstein for insightful conversations and constructive feedback. In addition, I deeply appreciate the excellent comments by Daniela Puzzello (Editor-in-Chief of this Journal), the Associate Editor, and three referees, which have improved the paper in numerous respects. Moreover, I thank B. Douglas Bernheim, Kristy Buzard, Gary Charness, Drew Fudenberg, Aviad Heifetz, Ehud Kalai, Lorenzo Magnolfi, Ildik{\'o} Magyari, D{\'a}vid Kriszti{\'a}n Nagy, David G. Pearce, John Roemer, Larry Samuelson, Joel Sobel, Oded Stark, and Harald Uhlig for useful observations and suggestions. All remaining errors and omissions are mine. Publisher Copyright: {\textcopyright} 2023 Elsevier B.V.",

year = "2023",

month = mar,

doi = "10.1016/j.jebo.2023.01.003",

language = "English (US)",

volume = "207",

pages = "50--80",

journal = "Journal of Economic Behavior and Organization",

issn = "0167-2681",

publisher = "Elsevier",

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T1 - Rational Altruism

AU - Tóbiás, Áron

N1 - Funding Information: I am very grateful to Ariel Rubinstein for insightful conversations and constructive feedback. In addition, I deeply appreciate the excellent comments by Daniela Puzzello (Editor-in-Chief of this Journal), the Associate Editor, and three referees, which have improved the paper in numerous respects. Moreover, I thank B. Douglas Bernheim, Kristy Buzard, Gary Charness, Drew Fudenberg, Aviad Heifetz, Ehud Kalai, Lorenzo Magnolfi, Ildikó Magyari, Dávid Krisztián Nagy, David G. Pearce, John Roemer, Larry Samuelson, Joel Sobel, Oded Stark, and Harald Uhlig for useful observations and suggestions. All remaining errors and omissions are mine. Publisher Copyright: © 2023 Elsevier B.V.

PY - 2023/3

Y1 - 2023/3

N2 - 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.

AB - 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.

KW - Altruism

KW - Collusion

KW - Coordination

KW - Efficiency

KW - Nash equilibrium

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VL - 207

SP - 50

EP - 80

JO - Journal of Economic Behavior and Organization

JF - Journal of Economic Behavior and Organization

ER -

Rational Altruism

Abstract

Keywords

ASJC Scopus subject areas

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