Need, greed and noise: competing strategies in a trading model

R. Donangelo, A. Hansen, K. Sneppen and S.R. Souza

Physica A: Statistical Mechanics and its Applications, 2005, vol. 348, issue C, 496-504

Abstract: We study an economic model where agents trade a variety of products by using one of the three competing rules: “need”, “greed” and “noise”. We find that the optimal strategy for any agent depends on both product composition in the overall market and composition of strategies in the market. In particular, a strategy that does best on pairwise competition may easily do much worse when all are present, leading, in some cases, to a “paper, stone, scissors” circular hierarchy.

Keywords: Agent-based models; Economic models; Strategic games (search for similar items in EconPapers)
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:eee:phsmap:v:348:y:2005:i:c:p:496-504

DOI: 10.1016/j.physa.2004.09.046

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