Shedding Light on El Farol

Posted: 6 Dec 2004

See all articles by Damien Challet

Damien Challet

CentraleSupélec; Encelade Capital SA

Matteo Marsili

Abdus Salam International Centre Theoretical Physics (ICTP)

Gabriele Ottino

University of Fribourg (Switzerland) - Department of Finance

Abstract

We mathematize El Farol bar problem and transform it into a workable model. In general, the average convergence to optimality at the collective level is trivial and does not even require any intelligence on the side of agents. Secondly, specializing to a particular ensemble of continuous strategies yields a model similar to the Minority Game. Statistical physics of disordered systems allows us to derive a complete understanding of the complex behavior of this model, on the basis of its phase diagram.

Keywords: El Farol, minority game, exact solution

Suggested Citation

Challet, Damien and Marsili, Matteo and Ottino, Gabriele, Shedding Light on El Farol. Physica A: Statistical Mechanics and its Applications, Vol. 332 , No. 1, pp. 469-482, February 2004. Available at SSRN: https://ssrn.com/abstract=626722

Damien Challet (Contact Author)

CentraleSupélec ( email )

Labo MICS
3, rue Joliot-Curie
Gif-sur-Yvette, 91192
France

Encelade Capital SA ( email )

Chemin du Bochet 8
Sulpice, 1025
Switzerland

Matteo Marsili

Abdus Salam International Centre Theoretical Physics (ICTP)

Strada Costiera 11
34100 Trieste
Italy

Gabriele Ottino

University of Fribourg (Switzerland) - Department of Finance ( email )

Avenue de l'Europe 20
CH-1700 Fribourg
Switzerland

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