Naive reinforcement learning with endogenous aspirations

This article considers a simple model of reinforcement learning. All behavi or change derives from the reinforcing or deterring effect of instantaneous payoff experiences. Payoff experiences are reinforcing or deterring depend ing on whether the payoff exceeds an aspiration level or falls short of it. Over time, the aspiration level is adjusted toward the actually experience d payoffs. This article shows that aspiration level adjustments may improve the decision maker's long-run performance by preventing him or her from fe eling dissatisfied with even the best available strategies. However, such m ovements also lead to persistent deviations from expected payoff maximizati on by creating "probability matching" effects.