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

Author

Listed:
  • Xu, Hedong
  • Fan, Suohai
  • Tian, Cunzhi
  • Xiao, Xinrong

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.

Suggested Citation

  • Xu, Hedong & Fan, Suohai & Tian, Cunzhi & Xiao, Xinrong, 2019. "Effect of strategy-assortativity on investor sharing games in the market," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 514(C), pages 211-225.
  • Handle: RePEc:eee:phsmap:v:514:y:2019:i:c:p:211-225
    DOI: 10.1016/j.physa.2018.09.056
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    References listed on IDEAS

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    Cited by:

    1. Ennio Bilancini & Leonardo Boncinelli & Alessandro Tampieri, 2021. "Strategy Assortativity and the Evolution of Parochialism," DEM Discussion Paper Series 21-20, Department of Economics at the University of Luxembourg.
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    4. Lin, Zhiqi & Xu, Hedong & Fan, Suohai, 2020. "Evolutionary accumulated temptation game on small world networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 553(C).

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