Games and Economic Behavior
In this paper, we examine strategic settings in which players have interdependent preferences. Players' utility functions depend not only on the strategy profile being played, but also on the realized utilities of other players. Thus, players' realized utilities are interdependent, capturing the psychological phenomena of affective empathy and emotional contagion. We offer a solution concept for these empathetic games and show that the set of equilibria is non-empty and, generically, finite. Motivated by psychological evidence, we then analyze sympathetic and antipathetic games. In the former, players' utilities increase in others' realized utilities, capturing unconditional friendship; in the latter, the opposite holds, resembling hostility.
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This work is licensed under a Creative Commons Attribution 4.0 International License.
Licensed to Smith College and distributed CC-BY under the Smith College Faculty Open Access Policy.
Vásquez, Jorge and Weretka, Marek, "Affective Empathy in Non-Cooperative Games" (2020). Economics: Faculty Publications, Smith College, Northampton, MA.
Peer reviewed accepted manuscript.