Emergent cooperation amongst competing agents in minority games

Abstract

We study a variation of the minority game. There are N agents. Each has to choose between one of two alternatives every day, and there is a reward to each member of the smaller group. The agents cannot communicate with each other, but try to guess the choice others will make, based only on the past history of the number of people choosing the two alternatives. We describe a simple probabilistic strategy using which the agents, acting independently, and trying to maximize their individual expected payoff, still achieve a very efficient overall utilization of resources, and the average deviation of the number of happy agents per day from the maximum possible can be made O(N^ϵ), for any ϵ>0. We also show that a single agent does not expect to gain by not following the strategy.