Adaptive Learning and Emergent Coordination in Minority Games

This work studies the properties of a coordination game in which agents repeatedly compete to be in the population minority. The game reflects some essential features of those economic situations in which positive rewards are assigned to individuals who behave in opposition to the modal behavior in a population. In this work we model a large group of agents who repeatedly interact in the game and we investigate the extent to which the system medium and long-run efficiency properties depend upon the specification of the agents’ microbehaviors in terms of their degree of rationality, the amount of information they use in making their choices, their learning patterns and the level of heterogeneity in the population. Our results show that, first, the system long-run properties strongly depend on the particular behavioral assumptions adopted, and, second, adding noise at the individual decision level and hence increasing heterogeneity in the population substantially improve aggregate welfare, although at the expense of a longer adjustment phase. In fact, the system achieves in that way a higher level of efficiency compared to that attainable by perfectly rational and completely informed agents.