Adaptive Learning and Emergent Coordination in Minority Games

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Adaptive Learning and Emergent Coordination in Minority Games

Author Info

Giulio Bottazzi
Giovanna Devetag
Giovanni Dosi

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Abstract

The work studies the properties of a coordination game in which agents repeatedly compete to be in the population minority. The game reflects 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.

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Publisher Info
Paper provided by Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy in its series LEM Papers Series with number 1999/24.

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Date of creation: 03 Dec 1999
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Handle: RePEc:ssa:lemwps:1999/24

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Paper
- Giulio Bottazzi & Giovanna Devetag & Giovanni Dosi, 2001. "Adaptive Learning and Emergent Coordination in Minority Games," Quaderni DISA 060, Department of Computer and Management Sciences, University of Trento, Italy.
- Giulio Bottazzi & Giovanna Devetag & Giovanni Dosi, 2001. "Adaptive Learning and Emergent Coordination in Minority Games," ROCK Working Papers 012, Department of Computer and Management Sciences, University of Trento, Italy.
- Giulio Bottazzi, Giovanna Devetag, Giovanni Dosi, 2001. "Adaptive Learning and Emergent Coordination in Minority Games," Computing in Economics and Finance 2001 20, Society for Computational Economics.

This paper has been announced in the following NEP Reports:

NEP-ALL-2002-05-03 (All new papers)

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

Willemien Kets, 2007. "The minority game: An economics perspective," Quantitative Finance Papers 0706.4432, arXiv.org. [Downloadable!]
Other versions:
- Kets, W., 2007. "The Minority Game: An Economics Perspective," Discussion Paper 2007-53, Tilburg University, Center for Economic Research. [Downloadable!]
Giorgio Fagiolo & Marco Valente, 2005. "Minority Games, Local Interactions, and Endogenous Networks," Computational Economics, Springer, vol. 25(1), pages 41-57, February. [Downloadable!] (restricted)
Other versions:
- Giorgio Fagiolo & Marco Valente, 2004. "Minority Games, Local Interactions, and Endogenous Networks," LEM Papers Series 2004/17, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy. [Downloadable!]
- Valente M. & Fagiolo G., 2004. "Minority Games, Local Interactions, and Endogenous Networks," Computing in Economics and Finance 2004 110, Society for Computational Economics. [Downloadable!]
John Duffy, 2004. "Agent-Based Models and Human Subject Experiments," Computational Economics 0412001, EconWPA. [Downloadable!]
Other versions:
- Duffy, John, 2006. "Agent-Based Models and Human Subject Experiments," Handbook of Computational Economics, in: Leigh Tesfatsion & Kenneth L. Judd (ed.), Handbook of Computational Economics, edition 1, volume 2, chapter 19, pages 949-1011 Elsevier. [Downloadable!] (restricted)

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