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Satisficing Leads to Cooperation in Mutual Interests Games

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  • Amit Pazgal

Abstract

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.

Suggested Citation

  • Amit Pazgal, 1995. "Satisficing Leads to Cooperation in Mutual Interests Games," Discussion Papers 1126, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  • Handle: RePEc:nwu:cmsems:1126
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    Cited by:

    1. Jaideep Roy, 2007. "When Aspiring And Rational Agents Strive To Coordinate," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 9(03), pages 461-475.
    2. Karandikar, Rajeeva & Mookherjee, Dilip & Ray, Debraj & Vega-Redondo, Fernando, 1998. "Evolving Aspirations and Cooperation," Journal of Economic Theory, Elsevier, vol. 80(2), pages 292-331, June.
    3. Marcin Dziubinski & Jaideep Roy, 2007. "Endogenous Selection of Aspiring and Rational rules in Coordination Games," CEDI Discussion Paper Series 07-14, Centre for Economic Development and Institutions(CEDI), Brunel University.

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