Strategies and evolution in the minority game: A multi-round strategy experiment

J. Linde, J. Sonnemans, J. Tuinstra

Research output: Contribution to JournalArticleAcademicpeer-review

Abstract

Minority games are a stylized description of strategic situations with both coordination and competition. These games are widely studied using either simulations or laboratory experiments. Simulations can show the dynamics of aggregate behavior, but the results of such simulations depend on the type of strategies used. So far experiments provided little guidance on the type of strategies people use because the set of possible strategies is very large. We therefore use a multi-round strategy method experiment to directly elicit people's strategies. Between rounds participants can adjust their strategy and test the performance of (possible) new strategies against strategies from the previous round. Strategies gathered in the experiment are subjected to an evolutionary competition. The strategies people use are very heterogeneous although aggregate outcomes resemble the symmetric Nash equilibrium. The strategies that survive evolutionary competition achieve much higher levels of coordination. © 2014 Elsevier Inc.
Original languageEnglish
Pages (from-to)77-95
JournalGames and Economic Behavior
Volume86
Issue numberJuly
Early online date26 Mar 2014
DOIs
Publication statusPublished - 2014

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