Effect of strategy-assortativity on investor sharing games in the market

Hedong Xu, Suohai Fan, Cunzhi Tian and Xinrong Xiao

Physica A: Statistical Mechanics and its Applications, 2019, vol. 514, issue C, 211-225

Abstract: An investor sharing game is proposed in a heterogeneous population which is divided into two kinds of groups, such as weak-power investors and strong-power investors. Economically, the degree of monopoly in the market is introduced in the game. Measuring the strategy-assortativity, the probability p decides what kind of investors’ partner in the game. We show that there are three kinds of equilibrium states in the process. In equilibrium states, all of weak-power investors cooperate while the density of strong-power cooperators depends on p. Social welfare is highest if every one cooperates. In order to promote cooperation in strong-power groups, higher strategy-assortativity is needed in a more monopolized market. Interestingly, given the degree of monopoly, when the ratio of strong-power investor’s amount to weak-power investor’s amount rises, the emergence of cooperative behaviors in strong-power groups only requires a lower p.

Keywords: Investor sharing game; Strategy-assortativity; Degree of monopoly; Cooperative behavior (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:phsmap:v:514:y:2019:i:c:p:211-225

DOI: 10.1016/j.physa.2018.09.056

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