10 research outputs found
When Aspiring and Rational Agents Strive to Coordinate
The paper studies a game of common interest played infinitely many times between two players, one being aspiration driven while the other being a myopic optimizer. It is shown that the only two long run stationary outcomes are the two static equilibrium points. Robustness of long run behaviour is studied to show that whenever the optimizer is allowed to make small mistakes, players are able to coordinate on the Pareto dominant equilibrium point most of the time in the long run if the speed of evolution of aspirations is sufficiently fast. However, when only the aspiring player is allowed to make small mistakes, achieving coordination is inevitable and independent of the speed at which aspirations evolve.coordination; evolution of aspiration; myopic Optimization
Endogenous selection of aspiring and rational rules in coordination games
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.Co-evolution, Aspirations, Best-response, Random matching, Coordination games
Endogenous Selection of Aspiring and Rational rules in Coordination Games
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 aspiring 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 players 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.
Endogenous selection of aspiring and rational rules in coordination games
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
Endogenous selection of aspiring and rational rules in coordination games
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
When aspiring and rational agents strive to coordinate
The paper studies a game of common interest played infinitely many times between two players, one being aspiration driven while the other being a myopic optimizer. It is shown that the only two long run stationary outcomes are the two static equilibrium points. Robustness of long run behavior is studied to show that whenever the optimizer is allowed to make small mistakes, players are able to coordinate on the Pareto dominant equilibrium point most of the time in the long run if the speed of evolution of aspirations is sufficiently fast. However, when only the aspiring player is allowed to make small mistakes, achieving coordination is inevitable and independent of the speed at which aspirations evolve
WHEN ASPIRING AND RATIONAL AGENTS STRIVE TO COORDINATE
The paper studies a game of common interest played infinitely many times between two players, one being aspiration driven while the other being a myopic optimizer. It is shown that the only two long run stationary outcomes are the two static equilibrium points. Robustness of long run behavior is studied to show that whenever the optimizer is allowed to make small mistakes, players are able to coordinate on the Pareto dominant equilibrium point most of the time in the long run if the speed of evolution of aspirations is sufficiently fast. However, when only the aspiring player is allowed to make small mistakes, achieving coordination is inevitable and independent of the speed at which aspirations evolve.Coordination, evolution of aspiration, myopic optimization, JEL Classification: C72, JEL Classification: D83