Berge equilibria and the equilibria of the altruistic game

Abstract

Berge’s notion of equilibrium represents a complementary alternative to the Nash equilibrium when modeling socioeconomic behavior and human interactions. While the notion of Nash equilibrium is based on self-interest, as players seek to maximize their own payofs given the action of the other players, the idea behind Berge equilibrium is mutual support, as given the action of one of the players, all others select their actions looking for her best interest. However, because of the demanding conditions involved, the existence of Berge equilibria is rarely guaranteed. In this paper, we propose vector-valued normal-form games as a unifed framework in which to study and extend the concept of Berge equilibrium. Based on the equilibria of the so-called altruistic game, we introduce new equilibrium concepts which constitute diferent relaxations of Berge’s notion, although they still retain the underlying idea of mutual support. We establish the links between these new equilibria, Nash equilibrium, Berge equilibrium, and other related concepts already existing in the literature. Our approach has the advantage that it permits the incorporation of preference information to identify the equilibria which are consistent with diferent altruistic attitudes of the players.