Absolute Expediency and Imitative

1This paper is based on some parts of my PhD thesis supervisored by Tilman Börgers at UCL. I really thanks him for his advice and support. Financial support from the Bank of Spain is gratefully acknowledged. This paper analyses a model of learning by imitation, where besides the decision maker, there is a population of individuals facing the same decision problem. We analyse a property called Absolute Expediency, which requires that the decision maker’s expected payo ¤ increases from one round to the next for every decision problem and every state of the population. We give a simple characterisation of the expediency property and show that its basic feature is proportional imitation: the change in the probability attached to the played action is proportional to the di¤erence between the received and the sampled payo ¤ (the sampled payo ¤ plays the role of an aspiration level).