Congestion, Equilibrium and Learning: The Minority Game

Abstract

The minority game is a simple congestion game in which the players’ main goal is to choose among two options the one that is adopted by the smallest number of players. We characterize the set of Nash equilibria and the limiting behavior of several well-known learning processes in the minority game with an arbitrary odd number of players. Interestingly, different learning processes provide considerably different predictions.Learning;congestion games;replicator dynamic;perturbed best response dynamics;quantal response equilibria;best-reply learning