Positive harmony transformations and equilibrium selection in two-player games

Working paper

Game harmony is a generic game property that describes how harmonious (non-conflictual) or disharmonious (conflictual) the interests of players are, as embodied in the payoffs. It can be used to predict cooperation in two-player games. We show how, for large enough positive harmony transformations of the game, a utilitarian solution is always a Nash equilibrium, coincides with the Nash bargaining solution and acquires further desirable properties of payoff and risk dominance. Case-based reasoning and team reasoning are alternative mechanisms by which game harmony measures can successfully predict cooperative behavior.

Authors: Zizzo, D

• Publication status: Published
• Publisher: University of Oxford
• Series: Department of Economics Discussion Paper Series
• Publication date: 2004-07-01
• Paper number: 197
• Keywords: cooperation; payoff dominance; game harmony; risk dominance