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Convergence and optimization of agent-based coalition formation

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  • Wang, Yuanshi
  • Wu, Hong

Abstract

In this paper, we analyze the model of agent-based coalition formation in markets. Our goal is to study the convergence of the coalition formation and optimize agents’ strategies. We show that the model has a unique steady state (equilibrium) and prove that all solutions converge to it in the case that the maximum size of coalitions is not larger than three. The stability of the steady state in other cases is not studied while numerical simulations are given to show the convergence. The steady state, which determines both the global system gain and the average gain per agent, is expressed by the agents’ strategies in the coalition formation. Through the steady state, we give the relationship between the gains and the agents’ strategies, and present a series of results for the optimization of agents’ strategies.

Suggested Citation

  • Wang, Yuanshi & Wu, Hong, 2005. "Convergence and optimization of agent-based coalition formation," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 348(C), pages 641-658.
  • Handle: RePEc:eee:phsmap:v:348:y:2005:i:c:p:641-658
    DOI: 10.1016/j.physa.2004.09.030
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    References listed on IDEAS

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    1. Wang, Yuanshi & Wu, Hong, 2004. "Dynamics of a cooperation–competition model for the WWW market," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 339(3), pages 609-620.
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    Cited by:

    1. Wang, Yuanshi & Wu, Hong, 2006. "Dynamics of a macroscopic model characterizing mutualism of search engines and web sites," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 363(2), pages 537-550.

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