Sociomeeting: A history lesson in econophysics -- The Minority Game
In 1994 economist W. Brian Arthur used the `El Farol Bar problem' to study the collective dynamics of boundedly rational agents. Each week each agent has to decide to go to the El Farol bar or not, knowing that they would only enjoy this if the bar was not too crowded. The agents knew the past attendance, but had limited prediction strategies. Based on this, Challet and Zhang then proposed the Minority Game (MG) in 1997. Agents take binary actions based on past information, and the agents in the minority score points. This was the time when the field of ‘econophysics’ first emerged in the late 1990s. Arthur’s work and the MG were some of the early agent-based models in this area.
In this talk I will summarise some of the ideas from that time, in particular the Minority Game. Physicists quickly took over the analysis of the MG, once it had been realised that the model shows an interesting ergodicity-breaking phase transition. I will describe the debates from that time about what methods might be best to study the MG, and I will summarise how the theory of disordered systems allowed a nearly complete solution.
I will also comment on the question if the MG is really a model of a market, and whether the MG-related statistical physics activity did or did not contribute to our understanding of economics. I will briefly discuss the perspectives of what is now called “complexity economics”.
This Talk will be broadcasted in the following zoom link: https://us06web.zoom.us/j/89027654460?pwd=Wg9TYMPqqP2ipfj2JVvEagmzaTw29c.1
Contact details:
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