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The Hamming distance in the minority game

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  • D'hulst, R
  • Rodgers, G.J

Abstract

We investigate different versions of the minority game, a toy model for agents buying and selling a commodity. The Hamming distance between the strategies used by agents to make decisions is introduced as an analytical tool to determine several properties of these models. The success rate of the agents in an adaptive version of the game is compared with the rate from a stochastic version. It is shown numerically and analytically that the adaptive process is inefficient, increasing the success rate of the unused strategies while decreasing the success rate of the strategies used by the agents. The agents do not do as well as if they were forced to use only one strategy permanently. A version of the game in which the agents strategies evolve is also analysed using the notion of distance. The agents evolve into a state in which they are all using one strategy, which is again the state that yields the maximum success rate.

Suggested Citation

  • D'hulst, R & Rodgers, G.J, 1999. "The Hamming distance in the minority game," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 270(3), pages 514-525.
    • Handle: RePEc:eee:phsmap:v:270:y:1999:i:3:p:514-525
    DOI: 10.1016/S0378-4371(99)00211-3
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    1. Arthur, W Brian, 1994. "Inductive Reasoning and Bounded Rationality," American Economic Review, American Economic Association, vol. 84(2), pages 406-411, May.
    2. Cairncross, Alec & Sinclair, Peter, 1982. "Introduction to Economics," Elsevier Monographs, Elsevier, edition 6, number 9780408710565.
    3. W. Brian Arthur, 1994. "Inductive Reasoning, Bounded Rationality and the Bar Problem," Working Papers 94-03-014, Santa Fe Institute.
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    Cited by:

    1. Metzler, Richard & Horn, Christian, 2003. "Evolutionary minority games: the benefits of imitation," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 329(3), pages 484-498.

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