Cooperation through Imitation
AbstractThis paper characterizes long-run outcomes for broad classes of symmetric games, when players select actions on the basis of average historical performance. Received wisdom is that when agent's interests are partially opposed, behavior is excessively competitive: ``keeping up with the Jones' '' lowers everyones' welfare. Here, we study the long-run consequences of imitative behavior when agents have sufficiently long memories --- and the outcome is dramatically different. Imitation robustly leads to cooperative outcomes (with highest symmetric payoffs) in the long run. This provides a rationale, for example, for collusive cartel-like behavior without collusive intent on the part of the agents.
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Bibliographic InfoPaper provided by Queen's University, Department of Economics in its series Working Papers with number 1042.
Length: 19 pages
Date of creation: Jan 2006
Date of revision:
Other versions of this item:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-03-18 (All new papers)
- NEP-EVO-2006-03-18 (Evolutionary Economics)
- NEP-GTH-2006-03-18 (Game Theory)
- NEP-MIC-2006-03-18 (Microeconomics)
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