Endogenous Selection of Aspiring and Rational rules in Coordination Games
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.
|Date of creation:||Feb 2007|
|Contact details of provider:|| Postal: CEDI, Brunel University,West London,UB8 3PH,United Kingdom|
Phone: +44 (0)1895 266649
Fax: +44 (0)1895 266649
Web page: http://www.cedi.org.uk
More information through EDIRC
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.:
- Bendor, J. & Mookherjee, D. & Ray, D., 1994.
"Aspirations, adaptive learning and cooperation in repeated games,"
1994-42, Tilburg University, Center for Economic Research.
- Bendor, J. & Mookherjee, D. & Ray, D., 1994. "Aspirations, Adaptive Learning and Cooperation in Reapeted Games," Papers 27, Boston University - Department of Economics.
- Binmore, Ken & Larry Samuelson, 1994.
"Muddling Through: Noisy Equilibrium Selection,"
Discussion Paper Serie B
275, University of Bonn, Germany.
- Binmore, K. & Samuelson, L., 1994. "Muddling Through: Noisy Equilibrium selection," Working papers 9410, Wisconsin Madison - Social Systems.
- Binmore, K. & samuelson, L., 1996. "Muddling Through : Noisy Equilibrium Section," Working papers 9410r, Wisconsin Madison - Social Systems.
- Ken Binmore & Larry Samuelson, 1994. "Muddling Through:Noisy Equilibrium Selection," Game Theory and Information 9403005, EconWPA, revised 29 Mar 1994.
- Ken Binmore & Larry Samuelson, 1994. "Muddling Through: Noisy Equilibrium Selection," Game Theory and Information 9410002, EconWPA.
- John G. Cross, 1973. "A Stochastic Learning Model of Economic Behavior," The Quarterly Journal of Economics, Oxford University Press, vol. 87(2), pages 239-266.
- Corchon, Luis C. & Mas-Colell, Andreu, 1996. "On the stability of best reply and gradient systems with applications to imperfectly competitive models," Economics Letters, Elsevier, vol. 51(1), pages 59-65, April.
- Eshel, I. & Samuelson, L. & Shaked, A., 1996.
"Altruists, Egoists and Hooligans in a Local Interaction Model,"
9612r, Wisconsin Madison - Social Systems.
- Eshel, I. & Samuelson, L. & Shaked, A., 1996. "Altruists, Egoists and Hooligans in a Local Interaction Model," Working papers 9612, Wisconsin Madison - Social Systems.
- Bendor Jonathan & Mookherjee Dilip & Ray Debraj, 2001. "Reinforcement Learning in Repeated Interaction Games," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 1(1), pages 1-44, March.
- Debraj Ray & Dilip Mookherjee & Fernando Vega Redondo & Rajeeva L. Karandikar, 1996.
"Evolving aspirations and cooperation,"
Working Papers. Serie AD
1996-06, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- Binmore, Ken & Samuelson, Larry, 1997. "Muddling Through: Noisy Equilibrium Selection," Journal of Economic Theory, Elsevier, vol. 74(2), pages 235-265, June.
- Fernando Vega Redondo & Frédéric Palomino, 1996.
"Convergence of aspirations and (partial) cooperation in the Prisoner's Dilemma,"
Working Papers. Serie AD
1996-20, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
- Fernando Vega-Redondo & Frédéric Palomino, 1999. "Convergence of aspirations and (partial) cooperation in the prisoner's dilemma," International Journal of Game Theory, Springer;Game Theory Society, vol. 28(4), pages 465-488.
- Palomino, F. & Vega, F., 1996. "Convergence of Aspirations and (Partial) Cooperation in the Prisoners's Dilemma," UFAE and IAE Working Papers 345.96, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Cecilia Chaing & Lindsay McSweeney, 2010. "A Behavioral Model of Rational Choice," CPI Journal, Competition Policy International, vol. 6, pages -.
- Dixon, Huw David, 2000. "Keeping up with the Joneses: competition and the evolution of collusion," Journal of Economic Behavior & Organization, Elsevier, vol. 43(2), pages 223-238, October.
When requesting a correction, please mention this item's handle: RePEc:edb:cedidp:07-14. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sarmistha Pal)
If references are entirely missing, you can add them using this form.