The paper studies an evolutionary model where players from a given population are randomly matched in pairs each period to play a co-ordination game. At each instant, a player can choose to adopt one of the two possible behavior rules, called the rational rule and the aspiring rule, and then take actions prescribed by the chosen rule. The choice between the two rules depends upon their relative performance in the immediate past. We show that there are two stable long run outcomes where either the rational rule becomes extinct and all players in the population achieve full eciency, or that both the behavior rules co-exist and there is only a partial use of ecient strategies in the population. These ndings support the use of the aspiration driven behavior in several existing studies and also help us take a comparative evolutionary look at the two rules in retrospect.
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Paper provided by Centre for Economic Development and Institutions(CEDI), Brunel University in its series CEDI Discussion Paper Series with number
07-14.
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Karandikar, R. & Mokherjee, D. & Ray, D. & Vega-Redondo, F., 1996.
"Evolving Aspirations and Cooperation,"
Papers
96-06, Valencia - Instituto de Investigaciones Economicas.