@article{70de90306708402aa467bb2303fc5a34,
title = "Games of love and hate",
abstract = "A strategic situation with payoff-based externalities is one in which a player{\textquoteright}s payoff depends on her own action and others{\textquoteright} 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.",
author = "Debraj Ray and Rajiv Vohra",
note = "Funding Information: Ray acknowledges funding under National Science Foundation grant SES-1629370. We thank Dilip Abreu, Ted Bergstrom, Sylvain Chassang, Peter Hammond, George Mailath, David Pearce, Phil Reny, Lones Smith, and Yeneng Sun for helpful comments. We are especially grateful to Lucas Pahl for help with example 7. The symbol ⓡ indicates that the authors{\textquoteright} names are in random order. We dedicated this paper to Tapan Mitra—advisor, colleague, and dear friend—on the occasion of his 70th birthday. His sense of aesthetics, minimalism, and rigor have been an inspiration to us. Tapan Mitra died on February 3, 2019. Publisher Copyright: {\textcopyright} 2020 by The University of Chicago. All rights reserved.",
year = "2020",
month = may,
day = "1",
doi = "10.1086/705552",
language = "English (US)",
volume = "128",
pages = "1789--1825",
journal = "Journal of Political Economy",
issn = "0022-3808",
publisher = "University of Chicago",
number = "5",
}