Evolutionary Dynamics of Bertrand Duopoly

Duopolies are one of the simplest economic situations where interactions between firms determine market behavior. The standard model of a price-setting duopoly is the Bertrand model, which has the unique solution that both firms set their prices equal to their costs-a paradoxical result where both firms obtain zero profit, which is generally not observed in real market duopolies. Here we propose a new game theory model for a price-setting duopoly, which we show resolves the paradoxical behavior of the Bertrand model and provides a consistent general model for duopolies

An Application of Evolutionary Game Theory to Social Dilemmas: The Traveler's Dilemma and the Minimum Effort Coordination Game

The Traveler's Dilemma game and the Minimum Effort Coordination game are two social dilemmas that have attracted considerable attention due to the fact that the predictions of classical game theory are at odds with the results found when the games are studied experimentally. Moreover, a direct application of deterministic evolutionary game theory, as embodied in the replicator dynamics, to these games does not explain the observed behavior. In this work, we formulate natural variants of these two games as smoothed continuous-strategy games. We study the evolutionary dynamics of these continuous-strategy games, both analytically and through agent-based simulations, and show that the behavior predicted theoretically is in accord with that observed experimentally. Thus, these variants of the Traveler's Dilemma and the Minimum Effort Coordination games provide a simple resolution of the paradoxical behavior associated with the original games

Evolution in group-structured populations can resolve the tragedy of the commons

Public goods are the key features of all human societies and are also important in many animal societies. Collaborative hunting and collective defence are but two examples of public goods that have played a crucial role in the development of human societies and still play an important role in many animal societies. Public goods allow societies composed largely of cooperators to outperform societies composed mainly of non-cooperators. However, public goods also provide an incentive for individuals to be selfish by benefiting from the public good without contributing to it. This is the essential paradox of cooperation-known variously as the Tragedy of the Commons, Multi-person Prisoner's Dilemma or Social Dilemma. Here, we show that a new model for evolution in group-structured populations provides a simple and effective mechanism for the emergence and maintenance of cooperation in such a social dilemma. This model does not depend on kin selection, direct or indirect reciprocity, punishment, optional participation or trait-group selection. Since this mechanism depends only on population dynamics and requires no cognitive abilities on the part of the agents concerned, it potentially applies to organisms at all levels of complexity

Emergence of local synchronization in neuronal networks with adaptive couplings

Local synchronization, both prolonged and transient, of oscillatory neuronal behavior in cortical networks plays a fundamental role in many aspects of perception and cognition. Here we study networks of Hindmarsh-Rose neurons with a new type of adaptive coupling, and show that these networks naturally produce both permanent and transient synchronization of local clusters of neurons. These deterministic systems exhibit complex dynamics with 1/fη power spectra, which appears to be a consequence of a novel form of self-organized criticality

Spatial heterogeneity promotes coexistence of rock-paper-scissor metacommunities

The rock-paper-scissor game -- which is characterized by three strategies R,P,S, satisfying the non-transitive relations S excludes P, P excludes R, and R excludes S -- serves as a simple prototype for studying more complex non-transitive systems. For well-mixed systems where interactions result in fitness reductions of the losers exceeding fitness gains of the winners, classical theory predicts that two strategies go extinct. The effects of spatial heterogeneity and dispersal rates on this outcome are analyzed using a general framework for evolutionary games in patchy landscapes. The analysis reveals that coexistence is determined by the rates at which dominant strategies invade a landscape occupied by the subordinate strategy (e.g. rock invades a landscape occupied by scissors) and the rates at which subordinate strategies get excluded in a landscape occupied by the dominant strategy (e.g. scissor gets excluded in a landscape occupied by rock). These invasion and exclusion rates correspond to eigenvalues of the linearized dynamics near single strategy equilibria. Coexistence occurs when the product of the invasion rates exceeds the product of the exclusion rates. Provided there is sufficient spatial variation in payoffs, the analysis identifies a critical dispersal rate $d^*$ required for regional persistence. For dispersal rates below $d^*$, the product of the invasion rates exceed the product of the exclusion rates and the rock-paper-scissor metacommunities persist regionally despite being extinction prone locally. For dispersal rates above $d^*$, the product of the exclusion rates exceed the product of the invasion rates and the strategies are extinction prone. These results highlight the delicate interplay between spatial heterogeneity and dispersal in mediating long-term outcomes for evolutionary games.Comment: 31pages, 5 figure

Evolution of Cooperation in Social Dilemmas with Assortative Interactions

Cooperation in social dilemmas plays a pivotal role in the formation of systems at all levels of complexity, from replicating molecules to multi-cellular organisms to human and animal societies. In spite of its ubiquity, the origin and stability of cooperation pose an evolutionary conundrum, since cooperation, though beneficial to others, is costly to the individual cooperator. Thus natural selection would be expected to favor selfish behavior in which individuals reap the benefits of cooperation without bearing the costs of cooperating themselves. Many proximate mechanisms have been proposed to account for the origin and maintenance of cooperation, including kin selection, direct reciprocity, indirect reciprocity, and evolution in structured populations. Despite the apparent diversity of these approaches they all share a unified underlying logic: namely, each mechanism results in assortative interactions in which individuals using the same strategy interact with a higher probability than they would at random. Here we study the evolution of cooperation in both discrete strategy and continuous strategy social dilemmas with assortative interactions. For the sake of tractability, assortativity is modeled by an individual interacting with another of the same type with probability r and interacting with a random individual in the population with probability 1−r, where r is a parameter that characterizes the degree of assortativity in the system. For discrete strategy social dilemmas we use both a generalization of replicator dynamics and individual-based simulations to elucidate the donation, snowdrift, and sculling games with assortative interactions, and determine the analogs of Hamilton’s rule, which govern the evolution of cooperation in these games. For continuous strategy social dilemmas we employ both a generalization of deterministic adaptive dynamics and individual-based simulations to study the donation, snowdrift, and tragedy of the commons games, and determine the effect of assortativity on the emergence and stability of cooperation

Evolution of Cooperation in Social Dilemmas on Complex Networks.

Cooperation in social dilemmas is essential for the functioning of systems at multiple levels of complexity, from the simplest biological organisms to the most sophisticated human societies. Cooperation, although widespread, is fundamentally challenging to explain evolutionarily, since natural selection typically favors selfish behavior which is not socially optimal. Here we study the evolution of cooperation in three exemplars of key social dilemmas, representing the prisoner's dilemma, hawk-dove and coordination classes of games, in structured populations defined by complex networks. Using individual-based simulations of the games on model and empirical networks, we give a detailed comparative study of the effects of the structural properties of a network, such as its average degree, variance in degree distribution, clustering coefficient, and assortativity coefficient, on the promotion of cooperative behavior in all three classes of games