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 mathematize El Farol bar problem and transform it into a workable model. We find general conditions under which the convergence of the average attendance to the resource level is trivial and does not even require any intelligence on the side of agents. Secondly, specializing to a particular...

A finite memory is introduced in the score dynamics of Minority Games. As expected, this removes the dependence of the stationary state on the initial conditions. However, it also causes an unexpected increase of fluctuations in grand-canonical models for very large times. Current analytical...

We mathematize El Farol bar problem and transform it into a workable model. In general, the average convergence to optimality at the collective level is trivial and does not even require any intelligence on the side of agents. Secondly, specializing to a particular ensemble of continuous...

We study the relation between the trading behavior of agents and volatility in toy markets of adaptive inductively rational agents. We show that excess volatility, in such simplified markets, arises as a consequence of i)the neglect of market impact implicit in price taking behavior and of ii)...

We propose a continuum model for the description of buyer and seller dynamics in an Internet market. The relevant variables are the research effort of buyers and the sellers' reputation building process. We show that, if a commercial web-site gives consumers the possibility to rate credibly...

We study investment strategy in different models of financial markets, where the investors cannot reach a perfect knowledge about available assets. The investor spends a certain effort to get information; this allows him to better choose the investment strategy, and puts a selective pressure...

I summarize the recent work on market (in)efficiency, highlighting key elements why financial markets will never be made efficient. My approach is not by adding more empirical evidence, but giving plausible reasons as to where inefficiency arises and why it's not rational to arbitrage it away.

The Interactive Minority Game (IMG) is an online version of the traditional Minority Game in which human players can enter into competition with the traditional computer-controlled agents. Through the rich (and, importantly, analytically understood) behaviour of the MG, we can explore humans'...