A model of "satisficing" behavior in the repeated Prisoners Dilemma is studied. Each player has an aspiration at each date, and takes an action. [S]he switches from the action played in the previous period only if the achieved payoff fell below the aspiration level (with a probability that...

This paper analyzes a complete market neoclassical economy with heterogeneous agents. Agents have addilog preferences and receive idiosyncratic labor productivity shocks. We show that at the aggregate level, such an economy behaves as if there was the representative consumer who faces shocks to...