Dynamical instabilities in a simple minority game with discounting

Challet, Damien; De Martino, Andrea; Marsili, Matteo

doi:10.1088/1742-5468/2008/04/L04004

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Dynamical instabilities in a simple minority game with discounting

Challet, Damien Institute for Scientifc Interchange (ISI), Torino, Italy - Physics department, University of Fribourg, Switzerland
De Martino, Andrea CNR/INFM SMC, Dipartimento di Fisica, Universita di Roma, Italy
Marsili, Matteo The Abdus Salam International Centre for Theoretical Physics, Trieste, Italy

2008

English We explore the effect of discounting and experimentation in a simple model of interacting adaptive agents. Agents belong to either of two types and each has to decide whether to participate a game or not, the game being profitable when there is an excess of players of the other type. We find the emergence of large fluctuations as a result of the onset of a dynamical instability which may arise discontinuously (increasing the discount factor) or continuously (decreasing the experimentation rate). The phase diagram is characterized in detail and noise amplification close to a bifurcation point is identified as the physical mechanism behind the instability.

Faculty

Faculté des sciences et de médecine

Department

Département de Physique

Language