A Trade Network Game with Endogenous Partner Selection

This paper develops an evolutionary trade network game (TNG) that combines evolutionary game play with endogenous partner selection. Successive generations of resource-constrained buyers and sellers choose and refuse trade partners on the basis of continually updated expected payoffs. Trade partner selection takes place in accordance with a modified Gale-Shapley matching mechanism, and trades are implemented using trade strategies evolved via a standardly specified genetic algorithm. The trade partnerships resulting from the matching mechanism are shown to be core stable and Pareto optimal in each successive trade cycle. Nevertheless, computer experiments suggest that these static optimality properties may be inadequate measures of optimality from an evolutionary perspective. Related work can be accessed at: http://www.econ.iastate.edu/tesfatsi/tnghome.htmTrade network formation; evolutionary game; endogenous partner selection; iterated prisoner's dilemma; Gale-Shapley matching

Emergence of social networks via direct and indirect reciprocity

Many models of social network formation implicitly assume that network properties are static in steady-state. In contrast, actual social networks are highly dynamic: allegiances and collaborations expire and may or may not be renewed at a later date. Moreover, empirical studies show that human social networks are dynamic at the individual level but static at the global level: individuals' degree rankings change considerably over time, whereas network-level metrics such as network diameter and clustering coefficient are relatively stable. There have been some attempts to explain these properties of empirical social networks using agent-based models in which agents play social dilemma games with their immediate neighbours, but can also manipulate their network connections to strategic advantage. However, such models cannot straightforwardly account for reciprocal behaviour based on reputation scores ("indirect reciprocity"), which is known to play an important role in many economic interactions. In order to account for indirect reciprocity, we model the network in a bottom-up fashion: the network emerges from the low-level interactions between agents. By so doing we are able to simultaneously account for the effect of both direct reciprocity (e.g. "tit-for-tat") as well as indirect reciprocity (helping strangers in order to increase one's reputation). This leads to a strategic equilibrium in the frequencies with which strategies are adopted in the population as a whole, but intermittent cycling over different strategies at the level of individual agents, which in turn gives rise to social networks which are dynamic at the individual level but stable at the network level

Hysteresis in an Evolutionary Labor Market with Adaptive Search

This study undertakes a systematic experimental investigation of hysteresis (path dependency) in an agent-based computational labor market framework. It is shown that capacity asymmetries between work suppliers and employers can result in two distinct hysteresis effects, network and behavioral, when work suppliers and employers interact strategically and evolve their worksite behaviors over time. These hysteresis effects result in persistent heterogeneity in earnings and employment histories across agents who have no observable structural differences. At a more global level, these hysteresis effects are shown to result in a one-to-many mapping between treatment factors and experimental outcomes. These hysteresis effects may help to explain why excess earnings heterogeneity is commonly observed in real-world labor markets.Dynamic labor market, Hysteresis (path dependency), Networks, Endogenous Interactions, Agent-based computational economics, Evolutionary game.

Hysteresis in an Evolutionary Labor Market with Adaptive Search

This study undertakes a systematic experimental investigation of hysteresis (path dependency) in an agent-based computational labor market framework. It is shown that capacity asymmetries between work suppliers and employers can result in two distinct hysteresis effects, network and behavioral, when work suppliers and employers interact strategically and evolve their worksite behaviors over time. These hysteresis effects result in persistent heterogeneity in earnings and employment histories across agents who have no observable structural differences. At a more global level, these hysteresis effects are shown to result in a one-to-many mapping between treatment factors and experimental outcomes. These hysteresis effects may help to explain why excess earnings heterogeneity is commonly observed in real-world labor markets. Related work can be accessed at: http://www.econ.iastate.edu/tesfatsi/tnghome.htmLabor markets; Agent-based test bed; path dependence (hysteresis); network formation; strategy evolution

Leaving the prison: A discussion of the Iterated prisoner`s dilemma under preferential partner selection.

Outside prison agents do not only ehoose a game strategy but also a game partner. In this paper players are finite automata and willing to interaet only if their expected payoff exeeeds an endogenously evolving aeeeptable minimum. In the resulting behavioural strueture the initial population is subdivided aeeording to players' degree of exploitiveness. If the number of eooperators is at least two, eooperators will be better off than defeetors. If more sueeessful automata reproduce, simulations show that due to partner seleetion eooperative behaviour is irnmune to invading mutants even if the life-span of generations is short.Prisoner`s dilemma; Partner selection; Finite automata; Matching;

ACE Models of Endogenous Interactions

Various approaches used in Agent-based Computational Economics (ACE) to model endogenously determined interactions between agents are discussed. This concerns models in which agents not only (learn how to) play some (market or other) game, but also (learn to) decide with whom to do that (or not).Endogenous interaction, Agent-based Computational Economics (ACE)

Analyzing Social Network Structures in the Iterated Prisoner's Dilemma with Choice and Refusal

The Iterated Prisoner's Dilemma with Choice and Refusal (IPD/CR) is an extension of the Iterated Prisoner's Dilemma with evolution that allows players to choose and to refuse their game partners. From individual behaviors, behavioral population structures emerge. In this report, we examine one particular IPD/CR environment and document the social network methods used to identify population behaviors found within this complex adaptive system. In contrast to the standard homogeneous population of nice cooperators, we have also found metastable populations of mixed strategies within this environment. In particular, the social networks of interesting populations and their evolution are examined.Comment: 37 pages, uuencoded gzip'd Postscript (1.1Mb when gunzip'd) also available via WWW at http://www.cs.wisc.edu/~smucker/ipd-cr/ipd-cr.htm

Preferential Partner Selection in an Evolutionary Study of Prisoner\u27s Dilemma

Partner selection is an important process in many social interactions, permitting individuals to decrease the risks associated with cooperation. In large populations, defectors may escape punishment by roving from partner to partner, but defectors in smaller populations risk social isolation. We investigate these possibilities for an evolutionary prisoner\u27s dilemma in which agents use expected payoffs to choose and refuse partners. In comparison to random or round-robin partner matching, we find that the average payoffs attained with preferential partner selection tend to be more narrowly confined to a few isolated payoff regions. Most ecologies evolve to essentially full cooperative behavior, but when agents are intolerant of defections, or when the costs of refusal and social isolation are small, we also see the emergence of wallflower ecologies in which all agents are socially isolated. In between these two extremes, we see the emergence of ecologies whose agents tend to engage in a small number of defections followed by cooperation thereafter. The latter ecologies exhibit a plethora of interesting social interaction patterns