Social Preference, Incomplete Information, and the Evolution of Ultimatum Game in the Small World Networks: An Agent-Based Approach

Abstract

Certain social preference models have been proposed to explain fairness behavior in experimental games. Existing bodies of research on evolutionary games, however, explain the evolution of fairness merely through the self-interest agents. This paper attempts to analyze the ultimatum game's evolution on complex networks when a number of agents display social preference. Agents' social preference is modeled in three forms: fairness consideration or maintaining a minimum acceptable money level, inequality aversion, and social welfare preference. Different from other spatial ultimatum game models, the model in this study assumes that agents have incomplete information on other agents' strategies, so the agents need to learn and develop their own strategies in this unknown environment. Genetic Algorithm Learning Classifier System algorithm is employed to address the agents' learning issue. Simulation results reveal that raising the minimum acceptable level or including fairness consideration in a game does not always promote fairness level in ultimatum games in a complex network. If the minimum acceptable money level is high and not all agents possess a social preference, the fairness level attained may be considerably lower. However, the inequality aversion social preference has negligible effect on the results of evolutionary ultimatum games in a complex network. Social welfare preference promotes the fairness level in the ultimatum game. This paper demonstrates that agents' social preference is an important factor in the spatial ultimatum game, and different social preferences create different effects on fairness emergence in the spatial ultimatum game.Spatial Ultimatum Game, Complex Network, Social Preference, Agent Based Modeling