Abstract

Recent years have witnessed a growing interest in analyzing a variety of socio-economic phenomena using methods from statistical and nonlinear physics. We study a class of complex systems arising from economics, the lowest unique bid auction (LUBA) systems, which is a recently emerged class of online auction game systems. Through analyzing large, empirical data sets of LUBA, we identify a general feature of the bid price distribution: an inverted J-shaped function with exponential decay in the large bid price region. To account for the distribution, we propose a multi-agent model in which each agent bids stochastically in the field of winner's attractiveness, and develop a theoretical framework to obtain analytic solutions of the model based on mean field analysis. The theory produces bid-price distributions that are in excellent agreement with those from the real data. Our model and theory capture the essential features of human behaviors in the competitive environment as exemplified by LUBA, and may provide significant quantitative insights into complex socio-economic phenomena.

Original languageEnglish (US)
Article number093003
JournalNew Journal of Physics
Volume17
Issue number9
DOIs
StatePublished - Sep 2 2015

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economics
human behavior
games
complex systems
physics
decay

Keywords

  • auction
  • minority game
  • multiagent system
  • self-consistency equation

ASJC Scopus subject areas

  • Physics and Astronomy(all)

Cite this

Multiagent model and mean field theory of complex auction dynamics. / Chen, Qinghua; Huang, Zi Gang; Wang, Yougui; Lai, Ying-Cheng.

In: New Journal of Physics, Vol. 17, No. 9, 093003, 02.09.2015.

Research output: Contribution to journalArticle

Chen, Qinghua ; Huang, Zi Gang ; Wang, Yougui ; Lai, Ying-Cheng. / Multiagent model and mean field theory of complex auction dynamics. In: New Journal of Physics. 2015 ; Vol. 17, No. 9.
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