The paper analyses how cooperation in a repeated social game may help to sustain cooperation in a "linked" repeated production game. We show that this may happen a)because of available "social capital", defined as the slack of punishment power present in the social repeated game, b) because,...

This paper studies the evolution of peoples' models of how other people think -- their theories of mind. First, this is formalized within the level-k model, which postulates a hierarchy of types, such that type k plays a k times iterated best response to the uniform distribution. It is found...

In this paper, I analyze stochastic adaptation in finite n-player games played by heterogeneous populations of myopic best repliers, better repliers and imitators. In each period, one individual from each of n populations, one for each player role, is drawn to play and chooses a pure strategy...

In this paper I define an evolutionary stability criterion for learning rules. Using Monte Carlo simulations, I then apply this criterion to a class of learning rules that can be represented by Camerer and Ho's (1999) model of learning. This class contains perturbed versions of reinforcement and...

This paper examines the effects of search costs on prices in a Bertrand duopoly. It is shown that if the search cost is lowered, the expected price goes down in a single play of the stage game. However, if the game is repeated it may be easier to sustain collusion the lower the search cost. In...

In the text-book model of dynamic Bertrand competition, competing firms meet the same demand function every period. This is not a satisfactory model of the demand side if consumers can make intertemporal substitution between periods. Each period then leaves some residual demand to future...

In this paper we model an evolutionary process with perpetual random shocks where individual behavior is determined by imitation. Every period an agent is randomly chosen from each of n finite populations to play a game. Each agent observes a sample of population-specific past strategy and...

This paper characterizes the unique Markov equilibrium in the sequential move, finite horizon pricing duopoly with discounting. Simple, short cycles repeat until the last two periods. For discount factors above 0.75488, there are three-period reaction function cycles and below 0.75488,...

In Young (1993, 1998) agents are recurrently matched to play a finite game and almost always play a myopic best reply to a frequency distribution based on a sample from the recent history of play. He proves that in a generic class of finite n-player games, as the mutation rate tends to zero,...

Saez-Marti and Weibull [4] investigate the consequences of letting some agents play a myopic best reply to the myopic best reply in Young's [8] bargaining model. This is how they introduce ''cleverness'' of players. We analyze such clever agents in general finite two-player games. We show that...