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Evolving Aspirations and Cooperation

Karandikar, Rajeeva and Mookherjee, Dilip and Ray, Debraj and Vega-Redondo, Fernando (1998) 'Evolving Aspirations and Cooperation.' Journal of Economic Theory, 80 (2). pp. 292-331. ISSN 0022-0531

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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.

Item Type: Article
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
SWORD Depositor: Elements
Depositing User: Elements
Date Deposited: 06 Jan 2013 15:30
Last Modified: 06 Jan 2022 14:37

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