Evolving aspirations and cooperation

  1. Rajeeva L. Karandikar 1
  2. Dilip Mookherjee 2
  3. Debraj Ray 3
  4. Fernando Vega-Redondo 4
  1. 1 Indian Statistical Institute
    info

    Indian Statistical Institute

    Calcuta, India

    ROR https://ror.org/00q2w1j53

  2. 2 Boston University; Indian Statistical Institute
  3. 3 Boston University; Instituto de Análisis Económico CSIC, España
  4. 4 Universitat d'Alacant
    info

    Universitat d'Alacant

    Alicante, España

    ROR https://ror.org/05t8bcz72

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Journal:
Working papers = Documentos de trabajo: Serie AD

Year of publication: 1996

Issue: 6

Pages: 1-38

Type: Working paper

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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.

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