Evolving aspirations and cooperation

Debraj Ray, Dilip Mookherjee, Fernando Vega Redondo and Rajeeva L. Karandikar
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Fernando Vega Redondo: Instituto Valenciano de Investigaciones Económicas
Rajeeva L. Karandikar: Indian Statistical Institute
Authors registered in the RePEc Author Service: Fernando Vega-Redondo

Working Papers. Serie AD from Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie)

Abstract: A model of "satisficing" behavior in the repeated Prisoners Dilemma is studied. Each player has an aspiration at each date, and takes an action. [S]he switches from the action played in the previous period only if the achieved payoff fell below the aspiration level (with a probability that depends on the shortfall). Aspirations are updated in each period, according to payoff experience in the previous period In addition, aspirations are subjected to random perturbations around the going level, with a small "tremble" probability. For sufficiently slow updating of aspirations, and small tremble probability, it is shown that in the long run both players cooperate most of the time.

Keywords: Cooperation; aspirations; learning (search for similar items in EconPapers)
Pages: 39 pages
Date: 1996-01
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Citations: View citations in EconPapers (1)

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http://www.ivie.es/downloads/docs/wpasad/wpasad-1996-06.pdf Fisrt version / Primera version, 1996 (application/pdf)

Related works:
Journal Article: Evolving Aspirations and Cooperation (1998)
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Persistent link: https://EconPapers.repec.org/RePEc:ivi:wpasad:1996-06

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