Cooperation through imitation
Research output: Journal Publications and Reviews (RGC: 21, 22, 62) › 21_Publication in refereed journal › Not applicable › peer-review
|Journal / Publication||Games and Economic Behavior|
|Early online date||31 Jan 2009|
|State||Published - Nov 2009|
|Link to Scopus||https://www.scopus.com/record/display.uri?eid=2-s2.0-70349331517&origin=recordpage|
This paper characterizes long-run outcomes for broad classes of symmetric games, when players select actions on the basis of average historical performance. Received wisdom suggests that when agent's interests are partially opposed, behavior is excessively competitive: "keeping up with the Jones' " lowers everyones' welfare. Here, we study the long-run consequences of imitative behavior when agents have sufficiently long memories and evaluate past actions in terms of (weighted) average payoff. Imitation robustly leads to cooperative outcomes (with highest symmetric payoffs) in the long run. Furthermore, lengthening memory reinforces this effect. This provides a rationale, for example, for collusive cartel-like behavior without collusive intent.
- Evolutionary games