@article{d9b03ccf0d204513a4601420d2d49808,
title = "Learning aspiration in repeated games",
abstract = "We study infinitely repeated symmetric 2 × 2 games played by bounded rational agents who follow a simple rule of thumb: each agent continues to play the same action if the current payoff exceeds the average of the past payoffs, and switches to the other action with a positive probability otherwise. By applying the stochastic approximation technique, we characterize the asymptotic outcomes for all 2×2 games. In the prisoners' dilemma game, for example, the players cooperate in the limit if and only if the gain from defecting against cooperation is {"}modest.{"}",
keywords = "Aspiration, Bounded rationality, Cooperation, Mean dynamics, Recursive learning, Repeated games, Satisficing behavior, Stochastic approximation",
author = "Cho, {In Koo} and Akihiko Matsui",
note = "Funding Information: ∗ Corresponding author. Fax: +1 217 244 6678. E-mail address: inkoocho@uiuc.edu (I.-K. Cho). 1Financial support from the National Science Foundation (SES-0004315) is gratefully acknowledged. Any opinions, findings, and conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of the National Science Foundation. 2Financial support from the Ministry of Education and Science of Japan is gratefully acknowledged. Any opinions, findings, and conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of the Ministry. 3The satisficing behavior, or the “win-stay, lose-shift” principle, is observed in animal behavior as well as in human behavior. Thorndike [23] mentioned this type of behavior prior to Simon [22].",
year = "2005",
month = oct,
doi = "10.1016/j.jet.2004.12.001",
language = "English (US)",
volume = "124",
pages = "171--201",
journal = "Journal of Economic Theory",
issn = "0022-0531",
publisher = "Academic Press Inc.",
number = "2",
}