Convergence of aspirations and (partial) cooperation in the prisoner's dilemma

F. Vega Redondo, F. PALOMINO

International Journal of Game Theory

1999, vol. 28, n°4, pp.465-488

Départements : Finance

This paper proposes an aspiration-based dynamic model for cooperation where a large population of agents are matched afresh every period to playa Prisoner's Dilemma. At each point in time, agents hold a common aspiration level which is updated on the basis of some "population statistic". i.e. a certain scalar summary (e.g. average payoff) associated to the current state. On the other hand, those agents who feel "dissatisfied" (relative to-current aspiration) switch actions at a rate which is increasing in the magnitude:of the dissatisfaction. The resulting process is shown to converge in the long run under quite general conditions. Moreover, if agents are responsive enough, the long-run social state displays some extent of cooperation, with a constant positive fraction of the population (always less than half) choosing to cooperate in every period.