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Endogenous selection of aspiring and rational rules in coordination games

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  • Dziubinski, Marcin
  • Roy, Jaideep

Abstract

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.

Suggested Citation

  • Dziubinski, Marcin & Roy, Jaideep, 2007. "Endogenous selection of aspiring and rational rules in coordination games," MPRA Paper 5941, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:5941
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    References listed on IDEAS

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    More about this item

    Keywords

    Co-evolution; Aspirations; Best-response; Random matching; Coordination games;
    All these keywords.

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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