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Satisficing and optimality in 2þ2 common interest games

Author

Listed:
  • Youngse Kim

    (Department of Economics, Yonsei University, Seoul 120-749, KOREA)

Abstract

The paper studies the evolution of cooperation when satisficing players repeatedly play a symmetric two-by-two game of common interest. We show that if initial aspiration levels are sufficiently close to the efficient payoff and aspiration adjusts at a sufficiently slow speed then the unique long run state will be the efficient outcome. In the special case of coordination games, the more tension there is between payoff dominance and risk dominance, the longer it takes for the system to lock into the payoff dominant outcome.

Suggested Citation

  • Youngse Kim, 1999. "Satisficing and optimality in 2þ2 common interest games," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 13(2), pages 365-375.
    • Handle: RePEc:spr:joecth:v:13:y:1999:i:2:p:365-375
    Note: Received: June 23, 1997; revised version: November 19, 1997
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    Citations

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    Cited by:

    1. Siegfried Berninghaus & Werner Güth & M. Vittoria Levati & Jianying Qiu, 2006. "Satisficing in sales competition: experimental evidence," Papers on Strategic Interaction 2006-32, Max Planck Institute of Economics, Strategic Interaction Group.
    2. Bernard GROFMAN & Joseph GODFREY, 2014. "Aspiration Models of Committee Decision Making," Economics Working Paper from Condorcet Center for political Economy at CREM-CNRS 2014-04-ccr, Condorcet Center for political Economy.
    3. Rajiv Sarin & Hyun Chang Yi, 2020. "A Model of Satisficing Behaviour," Working Papers 2020-21, Economic Research Institute, Bank of Korea.
    4. Segismundo S. Izquierdo & Luis R. Izquierdo & Nicholas M. Gotts, 2008. "Reinforcement Learning Dynamics in Social Dilemmas," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 11(2), pages 1-1.

    More about this item

    Keywords

    Common interest · Case-based decision theory · Aspiration · Payoff dominance · Risk dominance.;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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