Efficient resource distribution in a minority game with a biased pool of strategies

Yip, K. F.; Hui, P. M.; Lo, T. S.; Johnson, Neil F.

doi:10.1016/s0378-4371(02)01795-8

Cited by 19 publications

(10 citation statements)

References 15 publications

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“…Along with the progress in the research of econophysics (10), MG has been mostly applied to simulate one kind of CAS, namely the stock market (11,12). Alternatively, MG can also be interpreted as a multiagent system competing for a limited resource (13,14) that distributes equally in 2 rooms. However, agents in the real world often have to face a competition to the limited resource, which distributes in different places in a biased manner.…”

mentioning

confidence: 99%

Heterogeneous preferences, decision-making capacity, and phase transitions in a complex adaptive system

Wang

Chen

Huang

2009

Proc. Natl. Acad. Sci. U.S.A.

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There has been a belief that with the directing power of the market, the efficient state of a resource-allocating system can eventually be reached even in a case where the resource is distributed in a biased way. To mimic the realistic huge system for the resource allocation, we designed and conducted a series of economic experiments. From the experiments we found that efficient allocation can be realized despite a lack of communications among the participants or any instructions to them. To explain the underlying mechanism, an extended minority game model called the market-directed resource allocation game (MDRAG) is constructed by introducing heterogeneous preferences into the strategy-building procedures. MDRAG can produce results in good agreement with the experiments. We investigated the influence of agents' decision-making capacity on the system behavior and the phase structure of the MDRAG model as well. A number of phase transitions are identified in the system. In the critical region, we found that the overall system will behave in an efficient, stable, and unpredictable mode in which the market's invisible hand can fully play its role.

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confidence: 99%

Heterogeneous preferences, decision-making capacity, and phase transitions in a complex adaptive system

Wang

Chen

Huang

2009

Proc. Natl. Acad. Sci. U.S.A.

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“…Using this kind of experimental settings will allow us to investigate the herd behavior in a well regulated abstract system for resource allocation, which reflects the fundamental characteristics of many CASs (14)(15)(16)(17). Human participants of the resource-allocation experiment are students recruited from several departments of Fudan University.…”

Section: Methodsmentioning

confidence: 99%

Herd behavior in a complex adaptive system

Zhao

Yang

Wang

et al. 2011

Proc. Natl. Acad. Sci. U.S.A.

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In order to survive, self-serving agents in various kinds of complex adaptive systems (CASs) must compete against others for sharing limited resources with biased or unbiased distribution by conducting strategic behaviors. This competition can globally result in the balance of resource allocation. As a result, most of the agents and species can survive well. However, it is a common belief that the formation of a herd in a CAS will cause excess volatility, which can ruin the balance of resource allocation in the CAS. Here this belief is challenged with the results obtained from a modeled resource-allocation system. Based on this system, we designed and conducted a series of computer-aided human experiments including herd behavior. We also performed agent-based simulations and theoretical analyses, in order to confirm the experimental observations and reveal the underlying mechanism. We report that, as long as the ratio of the two resources for allocation is biased enough, the formation of a typically sized herd can help the system to reach the balanced state. This resource ratio also serves as the critical point for a class of phase transition identified herein, which can be used to discover the role change of herd behavior, from a ruinous one to a helpful one. This work is also of value to some fields, ranging from management and social science, to ecology and evolution, and to physics.experimental econophysics | computational econophysics | market-directed resource-allocation game | minority game | agent-based model

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“…The statics of MGs with correlated strategies were first studied using replica methods in [2]. Numerical results are also found in [23], and in [24], where an effective correlation between the assigned strategies was introduced upon biasing the {R µ ia } towards one of the binary entries. Let us finally, in this section, introduce the volatility, σ 2 , of the market.…”

Section: Model Definitionsmentioning

confidence: 99%

Strategy correlations and timing of adaptation in Minority Games

Galla

Sherrington

2005

Eur. Phys. J. B

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Abstract. We study the role of strategy correlations and timing of adaptation for the dynamics of Minority Games, both simulationally and analytically. Using the exact generating functional approachà la De Dominicis we compute the phase diagram and the behaviour of batch and on-line games with correlated strategies, complementing exisiting replica studies of their statics. It is shown that the timing of adaptation can be relevant; while conventional games with uncorrelated strategies are nearly insensitive to the choice of on-line versus batch learning, we find qualitative differences when anti-correlations are present in the strategy assignments. The available standard approximations for the volatility in terms of persistent order parameters in the stationary ergodic states become unreliable in batch games under such circumstances. We then comment on the role of oscillations and the relation to the breakdown of ergodicity. Finally, it is discussed how the generating functional formalism can be used to study mixed populations of so-called 'producers' and 'speculators' in the context of the batch minority games.

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Efficient resource distribution in a minority game with a biased pool of strategies

Cited by 19 publications

References 15 publications

Heterogeneous preferences, decision-making capacity, and phase transitions in a complex adaptive system

Heterogeneous preferences, decision-making capacity, and phase transitions in a complex adaptive system

Herd behavior in a complex adaptive system

Strategy correlations and timing of adaptation in Minority Games

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