Social and Individual Learning in the Minority Game

The Minority Game has been widely used to model decision-making and capture qualitative dynamics in simplified market settings. Prior research has predominantly focused on individual learning processes. Here we investigate how both individual and social learning shape market outcomes in the framework of the Minority Game. Social learning occurs by agents adopting successful investment strategies of their neighbours in a social network. Our findings indicate that social learning leads to herding and reduced diversity of trading strategies in the population, which results in large swings in trading behaviours and decreased social welfare. Conversely, individual learning fosters behavioural diversity thereby preventing agents from adopting similar strategies and thus stabilizing market outcomes. Our study contributes to understanding how learning mechanisms within social networks impact collective decision-making in financial contexts.