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Cooperation as a Result of Learning with Aspiration Levels

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  • Oechssler, Jörg

Abstract

It is shown that a win-stay, lose-hift behavior rule with endogenous aspiration levels yields cooperation in a certain class of games. The aspiration level in each round equals the current population average. The class of games includes the prisoner's dilemma and Cournot oligopoly and thus yields an explanation for cooperation and collusion.

Suggested Citation

  • Oechssler, Jörg, 2001. "Cooperation as a Result of Learning with Aspiration Levels," Bonn Econ Discussion Papers 8/2001, University of Bonn, Bonn Graduate School of Economics (BGSE).
    • Handle: RePEc:zbw:bonedp:82001
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    References listed on IDEAS

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    1. Karandikar, Rajeeva & Mookherjee, Dilip & Ray, Debraj & Vega-Redondo, Fernando, 1998. "Evolving Aspirations and Cooperation," Journal of Economic Theory, Elsevier, vol. 80(2), pages 292-331, June.
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    6. Schlag, Karl H., 1998. "Why Imitate, and If So, How?, : A Boundedly Rational Approach to Multi-armed Bandits," Journal of Economic Theory, Elsevier, vol. 78(1), pages 130-156, January.
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    More about this item

    Keywords

    cooperation;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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