Community formation in wealth-mediated thermodynamic strategy evolution.

Abstract

We study a dynamical system defined by a repeated game on a 1D lattice, in which the players keep track of their gross payoffs over time in a bank. Strategy updates are governed by a Boltzmann distribution, which depends on the neighborhood bank values associated with each strategy, relative to a temperature scale, which defines the random fluctuations. Players with higher bank values are, thus, less likely to change strategy than players with a lower bank value. For a parameterized rock-paper-scissors game, we derive a condition under which communities of a given strategy form with either fixed or drifting boundaries. We show the effect of a temperature increase on the underlying system and identify surprising properties of this model through numerical simulations.