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Satisficing Leads to Cooperation in Mutual Interests Games

  • Amit Pazgal
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    We study the play of mutual interests games by satisficing decision makers. We show that, for a high enough inital aspiration level, and under certain assumptions of "tremble," there is a high probability (close to unity) of convergence to the Pareto dominant cooperative outcome. Simulations indicate that the theoretical result is robust with respect to the "trembling" mechanism.

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    File URL: http://www.kellogg.northwestern.edu/research/math/papers/1126.pdf
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    Paper provided by Northwestern University, Center for Mathematical Studies in Economics and Management Science in its series Discussion Papers with number 1126.

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    Date of creation: May 1995
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    Handle: RePEc:nwu:cmsems:1126
    Contact details of provider: Postal: Center for Mathematical Studies in Economics and Management Science, Northwestern University, 580 Jacobs Center, 2001 Sheridan Road, Evanston, IL 60208-2014
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    Fax: 847/491-2530
    Web page: http://www.kellogg.northwestern.edu/research/math/Email:


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    1. Gilboa, Itzhak & Schmeidler, David, 1996. "Case-Based Optimization," Games and Economic Behavior, Elsevier, vol. 15(1), pages 1-26, July.
    2. Neyman, Abraham, 1985. "Bounded complexity justifies cooperation in the finitely repeated prisoners' dilemma," Economics Letters, Elsevier, vol. 19(3), pages 227-229.
    3. repec:dgr:kubcen:199442 is not listed on IDEAS
    4. Aderlini, L. & Ianni, A., 1993. "Path Dependence and Learning from Neighbours," Papers 186, Cambridge - Risk, Information & Quantity Signals.
    5. Rubinstein, Ariel, 1986. "Finite automata play the repeated prisoner's dilemma," Journal of Economic Theory, Elsevier, vol. 39(1), pages 83-96, June.
    6. Bendor, J. & Mookherjee, D. & Ray, D., 1994. "Aspirations, adaptive learning and cooperation in repeated games," Discussion Paper 1994-42, Tilburg University, Center for Economic Research.
    7. Osborne, Martin J., 1990. "Signaling, forward induction, and stability in finitely repeated games," Journal of Economic Theory, Elsevier, vol. 50(1), pages 22-36, February.
    8. Kandori, M. & Mailath, G.J., 1991. "Learning, Mutation, And Long Run Equilibria In Games," Papers 71, Princeton, Woodrow Wilson School - John M. Olin Program.
    9. Matsui, Akihiko, 1991. "Cheap-talk and cooperation in a society," Journal of Economic Theory, Elsevier, vol. 54(2), pages 245-258, August.
    10. Anderlini, L. & Sabourian, H., 1991. "Cooperation and Effective Computability," Papers 167, Cambridge - Risk, Information & Quantity Signals.
    11. Akihiko Matsui, 1989. "Cheap Talk and Cooperation in the Society," Discussion Papers 848, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    12. Abreu, Dilip & Rubinstein, Ariel, 1988. "The Structure of Nash Equilibrium in Repeated Games with Finite Automata," Econometrica, Econometric Society, vol. 56(6), pages 1259-81, November.
    13. Binmore, Kenneth G. & Samuelson, Larry, 1992. "Evolutionary stability in repeated games played by finite automata," Journal of Economic Theory, Elsevier, vol. 57(2), pages 278-305, August.
    14. Itzhak Gilboa & David Schmeidler, 1992. "Case-Based Decision Theory," Discussion Papers 994, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    15. Young, H Peyton, 1993. "The Evolution of Conventions," Econometrica, Econometric Society, vol. 61(1), pages 57-84, January.
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