Adaptive Boolean Networks and Minority Games with Time--Dependent Capacities

In this paper we consider a network of boolean agents that compete for a limited resource. The agents play the so called Generalized Minority Game where the capacity level is allowed to vary externally. We study the properties of such a system for different values of the mean connectivity $K$ of the network, and show that the system with K=2 shows a high degree of coordination for relatively large variations of the capacity level.Comment: 4 pages, 4 figure

Acquaintance role for decision making and exchanges in social networks

We model a social network by a random graph whose nodes represent agents and links between two of them stand for a reciprocal interaction; each agent is also associated to a binary variable which represents a dichotomic opinion or attribute. We consider both the case of pair-wise (p=2) and multiple (p>2) interactions among agents and we study the behavior of the resulting system by means of the energy-entropy scheme, typical of statistical mechanics methods. We show, analytically and numerically, that the connectivity of the social network plays a non-trivial role: while for pair-wise interactions (p=2) the connectivity weights linearly, when interactions involve contemporary a number of agents larger than two (p>2), its weight gets more and more important. As a result, when p is large, a full consensus within the system, can be reached at relatively small critical couplings with respect to the p=2 case usually analyzed, or, otherwise stated, relatively small coupling strengths among agents are sufficient to orient most of the system.Comment: 7 pages, 1 figur

Phase transitions in crowd dynamics of resource allocation

We define and study a class of resources allocation processes where $gN$ agents, by repeatedly visiting $N$ resources, try to converge to optimal configuration where each resource is occupied by at most one agent. The process exhibits a phase transition, as the density $g$ of agents grows, from an absorbing to an active phase. In the latter, even if the number of resources is in principle enough for all agents ($g<1$), the system never settles to a frozen configuration. We recast these processes in terms of zero-range interacting particles, studying analytically the mean field dynamics and investigating numerically the phase transition in finite dimensions. We find a good agreement with the critical exponents of the stochastic fixed-energy sandpile. The lack of coordination in the active phase also leads to a non-trivial faster-is-slower effect.Comment: 7 pages, 7 fig

Evolution of Market Heuristics

The time evolution of aggregate economic variables, such as stock prices, is affected by market expectations of individual investors. Neo-classical economic theory assumes that individuals form expectations rationally, thus enforcing prices to track economic fundamentals and leading to an efficient allocation of resources. However, laboratory experiments with human subjects have shown that individuals do not behave fully rational but instead follow simple heuristics. In laboratory markets prices may show persistent deviations from fundamentals similar to the large swings observed in real stock prices. Here we show that evolutionary selection among simple forecasting heuristics can explain coordination of individual behavior leading to three different aggregate outcomes observed in recent laboratory market forecasting experiments: slow monotonic price convergence, oscillatory dampened price fluctuations and persistent price oscillations. In our model forecasting strategies are selected every period from a small population of plausible heuristics, such as adaptive expectations and trend following rules. Individuals adapt their strategies over time, based on the relative forecasting performance of the heuristics. As a result, the evolutionary switching mechanism exhibits path dependence and matches individual forecasting behavior as well as aggregate market outcomes in the experiments. Our results are in line with recent work on agent-based models of interaction and contribute to a behavioral explanation of universal features of financial markets.

Irrelevance of memory in the minority game

By means of extensive numerical simulations we show that all the distinctive features of the minority game introduced by Challet and Zhang (1997), are completely independent from the memory of the agents. The only crucial requirement is that all the individuals must posses the same information, irrespective of the fact that this information is true or false.Comment: 4 RevTeX pages, 4 figure