Social Comparisons in Games

20 Pages Posted: 22 Jan 2008  

Jonathan Bendor

Stanford Graduate School of Business

Daniel Diermeier

Northwestern University - Kellogg School of Management

Michael M. Ting

Columbia University - Department of Political Science

Date Written: 1/18/2008

Abstract

We develop a model of adaptive learning in normal form games with social comparisons. Actors in the model adjust their behavior by aspiration-based adaptation: they are more likely to choose actions that recently yielded satisfactory payoffs and are less likely to repeat those that resulted in unsatisfactory payoffs.

Satisfaction is evaluated relative to an aspiration level that reflects previous payoffs. Aspirations, however, may depend not only on individual experiences but also on other players' payoffs. Thus, the model captures the effect of an important kind of social comparison, provided by exogenous reference groups. We show that under a variety of simple emulation patterns the presence of social comparisons significantly constrains the set of stable outcomes. In particular, if reference groups are sufficiently dense then in every stable outcome all players receive identical payoffs.

Keywords: social comparison, adaptation, satisfying

Suggested Citation

Bendor, Jonathan and Diermeier, Daniel and Ting, Michael M., Social Comparisons in Games (1/18/2008). Available at SSRN: https://ssrn.com/abstract=1086204 or http://dx.doi.org/10.2139/ssrn.1086204

Jonathan Bendor

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

Daniel Diermeier (Contact Author)

Northwestern University - Kellogg School of Management ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

Michael M. Ting

Columbia University - Department of Political Science ( email )

MC3320
420 West 118th Street
New York, NY 10027
United States

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