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 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 temperature increase on the underlying system, and identify surprising properties of this model through numerical simulations.