The propagation of cooperation in a spatial model of learning with endogenous aspirations

In this paper we build a spatial, aspiration-based model of learning in the context of a quantity setting oligopoly from which we want to explore the conditions that lead to the emergence of cooperation among firms. We consid er an economy consisting of many identical duopolies; each duopoly is place d on a square of a torus. The duopolists are boundedly rational agents whic h adopt a very simple behavioural rule: if they are earning at least averag e profits, they do not change their strategies; if they are earning below-a verage profits they imitate the strategy adopted by one of their neighbours . We consider many variations to this general setting and, in most of the c ases, we get results that support cooperation among firms.