HP Labs Technical Reports

Shop 'Til You Drop I: Market Trading Interactions as Adaptive Behavior

Cliff, Dave; Bruten, Janet

HPL-98-58

Keyword(s): market; economics; trading; agent; adaptive behaviour

Abstract: We argue that human economic interactions, particularly bargaining and trading in market environments, can be considered as adaptive behaviors. Moreover, the tools and techniques of adaptive behavior research could be profitably employed to build predictive models of existing or planned market systems. In addition to applications in economic modelling, "trading animats" could find use in market- based resource-allocation and control, and in internet-based commerce. Despite these potential applications, we note that there is a near-total absence of papers in the adaptive behaviour literature (and also in the artificial life literature) that deal with autonomous agents capable of exhibiting trading behaviors. After a brief overview of core concepts in microeconomics, we summarize work in experimental economics where human trading behavior is studied under laboratory conditions. We propose that such experiments could and should be used as 'benchmarks' for evaluating and comparing different architectures and strategies for trading anaimats. This paper is, essentially, a position paper: a manifesto calling the attention of the adaptive behavior research community to an entire field of problems that it has apparently so far ignored. In a companion paper [18], we present empirical results from simulations that invite a Braitenberg-style eliminative materialism perspective on the dynamics of experimental retail markets.

11 Pages

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