Cooperation and Friendship Choice Heuristics in Dynamic Local Interaction Networks

I built an agent-based model that simulates economic interaction in a social network. In the model, agents dynamically break and create network links based on whether their neighbors cooperate in a repeated Prisoner’s Dilemma game. Agents use heuristics to predict which potential neighbors will yield the highest payouts and form links with those neighbors, but some heuristics which are individually beneficial have significant negative externalities. Theseheuristics can change the network’s structure, increasing its vulnerability to systemic defection cascades which reduce payouts for all agents.