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Strategies and Evolution in the Minority Game: A Multi- Round Strategy Experiment

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  • Jona Linde

    (University of Amsterdam)

  • Joep Sonnemans

    (University of Amsterdam)

  • Jan Tuinstra

    (University of Amsterdam)

Abstract

Minority games are a stylized description of strategic situations with both coordination and competition. These games are widely studied using either simulations or laboratory experiments. Simulations can show the dynamics of aggregate behavior, but the results of such simulations depend on the type of strategies used. So far experiments provided little guidance on the type of strategies people use because the set of possible strategies is very large. We therefore use a multi-round strategy method experiment to directly elicit people's strategies. Between rounds participants can adjust their strategy and test the performance of (possible) new strategies against strategies from the previous round. Strategies gathered in the experiment are subjected to an evolutionary competition. The strategies people use are very heterogeneous although aggregate outcomes resemble the symmetric Nash equilibrium. The strategies that survive evolutionary competition achieve much higher levels of coordination.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 13-043/I.

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Date of creation: 07 Mar 2013
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Handle: RePEc:dgr:uvatin:20130043

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Web page: http://www.tinbergen.nl

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Keywords: minority game; strategy experiment; evolution; simulation;

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