The minority game is a generic model of competing adaptive agents, which is often believed to be a model of financial markets. We discuss to which extent this is a reasonable statement, and present minimal modifications that make this model reproduce stylized facts. The resulting model shows...

We present a derivation of the minority game from a market mechanism. This shows that the minority nature of the interaction crucially depends on the expectation model of agents. The same market mechanism with different expectations leads indeed to the majority game. We study in detail the...

We discuss the evidences supporting the view of financial markets as system operating close to a critical point. From the theoretical side, this picture is based on detailed knowledge of the behavior of Minority Games. These are models of heterogeneous agents interacting through a market...

We discuss a model of heterogeneous, inductive rational agents inspired by the El Farol Bar problem and the Minority Game. As in markets, agents interact through a collective aggregate variable — which plays a role similar to price — whose value is fixed by all of them. Agents follow a...

We present and study a Minority Game based model of a financial market where adaptive agents—the speculators—interact with deterministic agents—called producers. Speculators trade only if they detect predictable patterns which grant them a positive gain. Indeed the average number of active...

We show that the Multinomial Logit model of bounded rational choice can be derived in the same way as the Gibbs–Boltzmann distribution in statistical physics. In particular, this model describes the behavior of a thermodynamic agent (which is an agent whose utility function depends on a very...

We investigate the fluctuations induced by irrationality in simple games with a large number of competing players. We show that Nash equilibria in such games are “weakly” stable: irrationality propagates and amplifies through players' interactions so that huge fluctuations can result from a...

We propose and study a simple model of dynamical redistribution of capital in a diversified portfolio. We consider a hypothetical situation of a portfolio composed of N uncorrelated stocks. Each stock price follows a multiplicative random walk with identical drift and dispersion. The rules of...

Some phenomena are characterized by a non-trivial network dynamics exhibiting self-organized criticality or discontinuous transitions, coexistence and hysteresis. After a short review, we show that a similar approach suggests that social communities stabilized by network interactions may become...