Impact of Tag Recognition in Economic Decisions

In this paper we replicate the model by Axtell

et al

. (2000), a game where two agents ask for proportions of the same pie. After simulating the same scenarios, we get the same results, both in the cases of one-agent and two-agent types (tag model). Once we know the model has been properly replicated, we go one step further, by analyzing the influence in the observed behavior of the ‘rational’ decision rule and of the matrix payoff. First, we change the agent’s decision rule, so that agents could decide playing a heuristic which is not so ‘rational’ as the original rule. We also evaluate the dependence of the results on the selected payoff matrix. We conclude that both the decisions rules and the payoff matrix could affect how and when the equilibrium and the segregation emerge in the system. This is particularly interesting for the tag model, as it is related to the role of group recognition in economic decisions.