A Behavioral Model of Adaptation

Open Access       

Authors: Jose Apesteguia and Miguel Ángel Ballester

Journal of Economic Behavior & Organization, Vol. 207, 146-156, March, 2023

Adaptation refers to the process of changing behavior in response to a variation in the environment. We propose a model of an adaptive individual that contemplates two forces: on the one hand the individual benefits from adopting the ideal response to the new environment, but on the other hand, behavioral change is costly. We lay down the axiomatic foundations of the model. We then study two applications. The first studies a situation where ideal behavior depends on the response of another adaptive individual. The second analyzes the case where the ideal response is influenced by the strategic interaction in a cheap talk-like game.