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Aspiration, Sympathy and Minmax Outcome

Author

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  • Akihiko Matsui

    (University of Tokyo)

  • In-Koo Cho

    (University of Illinois)

Abstract

We focus on the outcomes sustained by the decision rule consistent with the satisficing behavior a la Simon [1987], slightly perturbed to incorporate sympathy in the spirit of Hume [1978]. For a general class of two person games, as the probability of continuing the long term relationship converges to 1, all agents in the economy almost always play the most egalitarian outcome among Pareto efficient outcome, which is the efficient Rawlsian outcome. The Rawlsian criterion is generated through repeated long term interactions among agents in a decentralized fashion.

Suggested Citation

  • Akihiko Matsui & In-Koo Cho, 2010. "Aspiration, Sympathy and Minmax Outcome," 2010 Meeting Papers 57, Society for Economic Dynamics.
  • Handle: RePEc:red:sed010:57
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    File URL: https://economicdynamics.org/meetpapers/2010/paper_57.pdf
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    References listed on IDEAS

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    1. Parikshit Ghosh & Debraj Ray, 1996. "Cooperation in Community Interaction Without Information Flows," Review of Economic Studies, Oxford University Press, vol. 63(3), pages 491-519.
    2. Takako Fujiwara-Greve & Masahiro Okuno-Fujiwara, 2009. "Voluntarily Separable Repeated Prisoner's Dilemma," Review of Economic Studies, Oxford University Press, vol. 76(3), pages 993-1021.
    3. 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.
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