The minority game with different payoff functions: Crowd-anticrowd theory

Kuen Lee, P. M. Hui, N. F. Johnson

Research output: Contribution to journalConference article

12 Scopus citations

Abstract

The crowd-anticrowd theory is applied to explain the features observed in a class of the minority game using different payoff functions. Simulations results using both the full strategy space and a reduced strategy space reveal that the standard deviation (SD) in the number of agents making a particular decision over time as a function of the agents' memory size m does not depend on the explicit form of the payoff function. The robustness of the results is explained in terms of the general features in strategy selection among the agents in different regimes of m. While different payoff functions may affect the popularity of a particular strategy, the strategy selection is found to be insensitive to the choice of payoff functions. The crowd-anticrowd cancellation effect leads to a minimum in SD at an intermediate value of m separating the small m regime characterized by crowd behavior and the large m regime characterized by random coin-toss behavior of the agents.

Original languageEnglish (US)
Pages (from-to)309-317
Number of pages9
JournalPhysica A: Statistical Mechanics and its Applications
Volume321
Issue number1-2
DOIs
StatePublished - Apr 1 2003
EventStatphys - Taiwan - 2002: Lattice Models and Complex Systems - Taipei and Taichung, Taiwan, Province of China
Duration: May 26 2002Jun 1 2002

Keywords

  • Agent-based models
  • Complex adaptive systems
  • Econophysics

ASJC Scopus subject areas

  • Statistics and Probability
  • Condensed Matter Physics

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