Comparative Statics of Altruism and Spite

The equilibrium outcome of a strategic interaction may depend on the weight players place on other players ’ payoffs or, more generally, on some social payoff that depends on everyone’s actions. A positive, negative or zero weight represents altruism, spite or complete selfishness, respectively. As it turns out, even in a symmetric interaction the equilibrium level of social payoff may be lower for a group of altruists than for selfish or spiteful groups. In particular, a concern for others ’ payoffs may paradoxically lower these payoffs. However, this can only be so if the equilibrium strategies involved are unstable. If they are stable, the social payoff can only increase or remain unchanged with an increasing degree of altruism. In these results, ‘stability ’ stands for a general notion of static stability, which includes a number of established ones, such as evolutionarily stable strategy, as special cases. JEL Classification: C62, C72, D64