Speaker: Aleksandra Aloric
Venue: Conference room 120
Time: Sep. 21 (Mon) 2:30-3:30pm
Title: Emergence of cooperative long-term market loyalty in double auction markets
Abstract: Loyal buyer-seller relationships can arise by design, e.g. when a seller tailors a product to a specific market niche to accomplish the best possible returns, and buyers respond to the dedicated efforts the seller makes to meet their needs. We ask whether it is possible, instead, for loyalty to arise spontaneously, and in particular as a consequence of repeated interaction and co-adaptation among the agents in a market. We devise a stylized model of double auction markets and adaptive traders that incorporates these features. Traders choose where to trade (which market) and how to trade (to buy or to sell) based on their previous experience. We find that when the typical scale of market returns (or, at fixed scale of returns, the intensity of choice $\beta$) become higher than some threshold, the preferred state of the system is segregated: both buyers and sellers are segmented into subgroups that are persistently loyal to one market over another. We characterize the segregated state analytically in the large market limit: it is stabilized by some agents acting cooperatively to enable trade, and provides higher rewards both for individual traders and the population as a whole than its unsegregated counterpart. In this talk I will describe the features and the main results of the model introduced. Finally I will discuss open questions in the directions of more realistic mechanism design as well as possible extensions toward the N player Battle of Sexes game.
Shor Bio: Aleksandra Aloric is a PhD student at Disordered Systems group at King's College London. She has entered the field of Game Theory working on the emergence of cooperation in the iterative prisoner's dilemma on various networks, continued working on it in a more evolutionary context exploring further Axelrod's famous tournaments. Current research interests still focus on the emergent collective phenomena in financial (loyalty) and biological (speciation) but explored also from the system design (mechanism design) perspective, not only individual strategy adaptation/evolution.
