TY - JOUR
T1 - Evolving Aspirations and Cooperation
AU - Karandikar, Rajeeva
AU - Mookherjee, Dilip
AU - Ray, Debraj
AU - Vega-Redondo, Fernando
N1 - Funding Information:
A 2_2 game is played repeatedly by two satisficing players. The game considered includes the Prisoner’s Dilemma, as well as games of coordination and common interest. Each player has an aspiration at each date, and takes an action. The action is switched at the subsequent period only if the achieved payoff falls below aspirations; the switching probability depends on the shortfall. Aspirations are periodically updated according to payoff experience, but are occasionally subject to trembles. For sufficiently slow updating of aspirations and small tremble probability, it is shown that both players must ultimately cooperate most of the time. Journal of Economic Literature Classification Numbers C72, D83. 1998 Academic Press * Ray gratefully acknowledges support under National Science Foundation Grant SBR-9414114. Vega-Redondo acknowledges support from the Spanish Ministry of Education, CICYT Project PB 94-1504. This research was started while Mookherjee and Vega-Redondo were visiting the Studienzentrum Gerzensee, Switzerland, during July 1993. We are grateful to Peter Sorensen for comments on the proof of one of the results. We thank an Associate Editor and two anonymous referees for comments on an earlier draft.
PY - 1998/6
Y1 - 1998/6
N2 - A 2×2 game is played repeatedly by two satisficing players. The game considered includes the Prisoner's Dilemma, as well as games of coordination and common interest. Each player has anaspirationat each date, and takes an action. The action is switched at the subsequent period only if the achieved payoff falls below aspirations; the switching probability depends on the shortfall. Aspirations are periodically updated according to payoff experience, but are occasionally subject to trembles. For sufficiently slow updating of aspirations and small tremble probability, it is shown that both players must ultimately cooperate most of the time.Journal of Economic LiteratureClassification Numbers C72, D83.
AB - A 2×2 game is played repeatedly by two satisficing players. The game considered includes the Prisoner's Dilemma, as well as games of coordination and common interest. Each player has anaspirationat each date, and takes an action. The action is switched at the subsequent period only if the achieved payoff falls below aspirations; the switching probability depends on the shortfall. Aspirations are periodically updated according to payoff experience, but are occasionally subject to trembles. For sufficiently slow updating of aspirations and small tremble probability, it is shown that both players must ultimately cooperate most of the time.Journal of Economic LiteratureClassification Numbers C72, D83.
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U2 - 10.1006/jeth.1997.2379
DO - 10.1006/jeth.1997.2379
M3 - Article
AN - SCOPUS:0000825694
SN - 0022-0531
VL - 80
SP - 292
EP - 331
JO - Journal of Economic Theory
JF - Journal of Economic Theory
IS - 2
ER -