LEARNING, COMPETITION AND COOPERATION IN SIMPLE GAMES

M. Ángeles R. de Cara, Óscar Pla and Francisco Guinea
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M. Ángeles R. de Cara: Instituto de Ciencia de Materiales, Consejo Superior de Investigaciones Científicas, E-28049, Madrid, Spain
Óscar Pla: Instituto de Ciencia de Materiales, Consejo Superior de Investigaciones Científicas, E-28049, Madrid, Spain
Francisco Guinea: Instituto de Ciencia de Materiales, Consejo Superior de Investigaciones Científicas, E-28049, Madrid, Spain

International Journal of Theoretical and Applied Finance (IJTAF), 2000, vol. 03, issue 03, 463-464

Abstract: The Minority Game was introduced to study the competition between agents with bounded rationality. As the amount of information available decreases, agents manage to arbitrage away all the information, and collective gain is then reduced. This crowd effect arises from the fact that only a minority can profit at each moment, while all agents make their choices using the same input. The properties of the model change drastically if agents make choices based on their individual histories, keeping all remaining rules unaltered. This variation reduces the intrinsic frustration of the model, and improves the tendency towards cooperation and self organization. Finally, we study the stable mixing of individual and cooperative behavior.

Date: 2000
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DOI: 10.1142/S0219024900000395

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