Rational Altruism

37 Pages Posted: 24 Jul 2019

Date Written: July 23, 2019


This article proposes a game-theoretic solution concept promoting endogenous cooperation in non-cooperative games 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 games with more than two players, rational altruism can take an opportunistic form and serve as a device of implicit collusion.

Keywords: Nash equilibrium, altruism, coordination, collusion, efficiency

JEL Classification: C72, D64, D91

Suggested Citation

Tóbiás, Áron, Rational Altruism (July 23, 2019). Available at SSRN: https://ssrn.com/abstract=3424594 or http://dx.doi.org/10.2139/ssrn.3424594

Áron Tóbiás (Contact Author)

Syracuse University ( email )

110 Eggers Hall
Syracuse University
Syracuse, NY 13244-1020
United States

HOME PAGE: http://www.arontobias.com

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