Cooperation as a result of learning with aspiration levels

It is shown that a win-stay, lose-shift behavior rule with endogenous aspiration levels yields cooperation in a certain class of games. Interaction takes place in many groups, markets, or locations simultaneously and the aspiration level in each round equals the current population average. The class of games includes the prisoner's dilemma and Cournot oligopoly and thus yields an explanation for cooperation and collusion. (C) 2002 Elsevier Science B.V. All rights reserved.