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A tractable evolutionary model for the Minority Game with asymmetric payoffs

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  • Dindo, P.D.E.

    (Universiteit van Amsterdam)

Abstract

We set up a simple behavioral model for a large population of agents who are repeatedly playing the Minority Game and whose interaction is modeled by means of the so-called replicator dynamics. This allows us to specify the dynamics of the aggregate variables, the number of agents choosing each side, in terms of a low-dimensional dynamical system that gives qualitatively the same results of the existing computational approaches. As an extension we introduce asymmetric payoffs, that is, we analyze the case where the minority and majority payoffs are side dependent. In this case the fluctuations out of the equilibrium are qualitatively different. In particular, contrary to the previous case, they are associated with a difference in the average payoff gained by each side. Furthermore, a parameter region exists where the dynamics does not converge to any isolated periodic attractor.

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  • Dindo, P.D.E., 2004. "A tractable evolutionary model for the Minority Game with asymmetric payoffs," CeNDEF Working Papers 04-17, Universiteit van Amsterdam, Center for Nonlinear Dynamics in Economics and Finance.
    • Handle: RePEc:ams:ndfwpp:04-17
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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. Jorgen W. Weibull, 1997. "Evolutionary Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262731215, December.
    3. W. Brian Arthur, 1994. "Inductive Reasoning, Bounded Rationality and the Bar Problem," Working Papers 94-03-014, Santa Fe Institute.
    4. Challet, D. & Zhang, Y.-C., 1997. "Emergence of cooperation and organization in an evolutionary game," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 246(3), pages 407-418.
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    Cited by:

    1. Bischi, Gian Italo & Merlone, Ugo & Pruscini, Eros, 2018. "Evolutionary dynamics in club goods binary games," Journal of Economic Dynamics and Control, Elsevier, vol. 91(C), pages 104-119.
    2. Gian Italo Bischi & Ugo Merlone, 2017. "Evolutionary minority games with memory," Journal of Evolutionary Economics, Springer, vol. 27(5), pages 859-875, November.

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