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Finite Memory Distributed Systems

Author

Listed:
  • Victor Dorofeenko

    (Insitute for Advanced Studies, Vienna)

  • Jamsheed Shorish

    (Insitute for Advanced Studies, Vienna)

Abstract
A distributed system model is studied, where individual agents engage in repeated play against each other and can change their strategies based upon previous play. Similar to Dorofeenko and Shorish (2005), it is shown how to model this environment in terms of continuous population densities (probabilities) of agent types. A complication arises because the population densities of different strategies depend upon each other not only through game payoffs, but also through the strategy distributions themselves. In spite of this, it is shown that when an agent imitates the strategy of his previous opponent and the rate of this imitation is high enough, the system of master equations which govern the dynamical evolution of agent populations can be reduced with high precision to one equation for the total population. In a sense, the dynamics of the full system can 'collapse' to the dynamics of the entire system taken as a whole, which describes the behavior of all types of agents. We explore the implications of this model, and present both analytical and simulation results

Suggested Citation

  • Victor Dorofeenko & Jamsheed Shorish, 2006. "Finite Memory Distributed Systems," Computing in Economics and Finance 2006 333, Society for Computational Economics.
    • Handle: RePEc:sce:scecfa:333
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    References listed on IDEAS

    as
    1. Sandholm, William H., 2003. "Evolution and equilibrium under inexact information," Games and Economic Behavior, Elsevier, vol. 44(2), pages 343-378, August.
    2. Leigh Tesfatsion & Kenneth L. Judd (ed.), 2006. "Handbook of Computational Economics," Handbook of Computational Economics, Elsevier, edition 1, volume 2, number 2.
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    6. Dorofeenko, Victor & Shorish, Jamsheed, 2005. "Partial differential equation modelling for stochastic fixed strategy distributed systems," Journal of Economic Dynamics and Control, Elsevier, vol. 29(1-2), pages 335-367, January.
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    More about this item

    Keywords

    Fokker-Plank; distributed system; fixed strategy;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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