Endogenous selection of aspiring and rational rules in coordination games

Marcin Dziubiński () and Jaideep Roy

MPRA Paper from University Library of Munich, Germany

Abstract: 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 as- piring 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 play- ers 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.

Keywords: Co-evolution; Aspirations; Best-response; Random matching; Coordination games (search for similar items in EconPapers)
JEL-codes: C72 C73 (search for similar items in EconPapers)
Date: 2007-11-25
New Economics Papers: this item is included in nep-cbe, nep-evo, nep-gth and nep-lab
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Related works:
Working Paper: Endogenous Selection of Aspiring and Rational rules in Coordination Games (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:5941

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