Adaptive learning and emergent coordination in minority games

Bottazzi, Giulio and Devetag, Giovanna and Dosi, Giovanni (2001) Adaptive learning and emergent coordination in minority games. In «ROCK Working Papers», Università degli Studi di Trento. (Unpublished)

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    The work studies the properties of a coordination game in which agents repeatedly compete to be in the population minority. The game re ects some essential features of those economic situations in which positive rewards are assigned to individuals who behave in opposition to the modal behavior in a population. Here we model a group of heterogeneous agents who adaptively learn and we investigate the transient and long-run aggregate properties of the system in terms of both allocative and informational efficiency. Our results show that, first, the system long-run properties strongly depend on the behavioral learning rules adopted, and, second, adding noise at the individual decision level and hence increasing heterogeneity in the population substantially improve aggregate welfare, although at the expense of a longer adjustment phase. In fact, the system achieves in that way a higher level of efficiency compared to that attainable by perfectly rational and completely informed agents.

    Item Type: Article in journal
    Department or Research center: Computer and management sciences
    Subjects: Q Science > QA Mathematics > QA269 Game theory
    H Social Sciences > HB Economic Theory > HB131 Methodology
    Repository staff approval on: 14 Jan 2011

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