Simple and Clever Decision Rules in Single Population Evolutionary Models

This paper compares two decision rules available to myopic players who are repeatedly randomly matched to play a 2 x 2 symmetric game. Players using the simple decision rule evaluate the strategies by comparing their current payoffs to those of an opponent currently playing the other strategy, while those following the clever decision rule assess the strategies under the assumption that opponents' actions are fixed. It is shown that while populations of simple players can fail to learn to play Nash equilibria or even dominant strategy equilibria, populations of clever players always learn to play approximate Nash equilibria. † I would like to thank Toshimasa Maruta, Zvika Neeman, Ady Pauzner, and Nicola Persico, as well as participants in a Northwestern University seminar for their comments. I would especially like to thank Eddie Dekel and Jeroen Swinkels for their guidance. Financial support from a National Science Foundation Graduate Fellowship is gratefully acknowledged. § MEDS-KGSM, Northwestern University, Evanston, IL, 60208. E-mail: [email protected]