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The Empirical Content of Adaptive Models

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  • Bendor, Jonatahn

    (Stanford U)

  • Diermeier, Daniel

    (Northwestern U)

  • Ting, Michael M.

    (Columbia U)

Abstract

Models with adaptive agents have become increasingly popular in computational sociology (e.g. Macy 1991, Macy and Flache 2002). In this paper we show that at least two important kinds of such models lack empirical content. In the first type players adjust via reinforcement learning: they adjust their propensities to undertake actions based on the kind of feedback they receive. In the second type players satisfice--i.e., retain the same action if the payoff is satisfactory--and search when payoffs are unsatisfactory. In both types of models feed-back is coded as satisfactory if it exceeds some aspiration level, where aspirations may themselves adjust to reflect prior payoffs. We show that outcomes in either type of model are highly sensitive to initial parameters; that is, any outcome of the stage game can be supported as a stable outcome. Intuitively, this occurs because players may be endowed with initial aspirations that make any outcome satisfactory, and thus the actions producing that outcome can be reinforced by all players. These results hold even when players' aspirations are endogenous. We also present two solutions to this problem. First, we show that stochastic versions of the model ensure ergodicity: i.e., the players' action-propensities and aspirations converge to a unique limiting distribution that is independent of their initial values. Second, we show that if players engage in social comparisons--specifically, an agent's aspiration depends on the payoffs of his peers, in addition to his own--then far fewer outcomes can be sustained in equilibrium.

Suggested Citation

  • Bendor, Jonatahn & Diermeier, Daniel & Ting, Michael M., 2002. "The Empirical Content of Adaptive Models," Research Papers 1877, Stanford University, Graduate School of Business.
  • Handle: RePEc:ecl:stabus:1877
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    References listed on IDEAS

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    1. Palfrey, Thomas R. & Rosenthal, Howard, 1984. "Participation and the provision of discrete public goods: a strategic analysis," Journal of Public Economics, Elsevier, vol. 24(2), pages 171-193, July.
    2. Bendor, Jonathan & Diermeier, Daniel & Ting, Michael M., 2000. "A Behavioral Model of Turnout," Research Papers 1627, Stanford University, Graduate School of Business.
    3. Drew Fudenberg & Eric Maskin, 2008. "The Folk Theorem In Repeated Games With Discounting Or With Incomplete Information," World Scientific Book Chapters, in: Drew Fudenberg & David K Levine (ed.), A Long-Run Collaboration On Long-Run Games, chapter 11, pages 209-230, World Scientific Publishing Co. Pte. Ltd..
    4. Herbert A. Simon, 1955. "A Behavioral Model of Rational Choice," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 69(1), pages 99-118.
    5. Michael W. Macy, 1989. "Walking out of Social Traps," Rationality and Society, , vol. 1(2), pages 197-219, October.
    6. Sidney G. Winter, 1971. "Satisficing, Selection, and the Innovating Remnant," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 85(2), pages 237-261.
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    Cited by:

    1. Cui Zhiwei & Zhai Jian & Liu Xuan, 2009. "The Efficiency of Observability and Mutual Linkage," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 9(1), pages 1-36, July.

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