The coevolution of overconfidence and bluffing in the resource competition game

TL;DR

This paper uses evolutionary game theory to explore how overconfidence and bluffing coevolve in resource competition, revealing that bluffing often surpasses overconfidence and network structure influences their prevalence and punishment.

Contribution

It introduces a simple resource competition model demonstrating the coevolution of overconfidence and bluffing and analyzes the effects of social network topology on their dynamics.

Findings

Bluffing tends to evolve to higher levels than overconfidence.

Heterogeneous networks facilitate bluffing but also enhance punishment of overconfidence.

High real capability allows coexistence of bluffing and overconfidence.

Abstract

Resources are often limited, therefore it is essential how convincingly competitors present their claims for them. Beside a player's natural capacity, here overconfidence and bluffing may also play a decisive role and influence how to share a restricted reward. While bluff provides clear, but risky advantage, overconfidence, as a form of self-deception, could be harmful to its user. Still, it is a long-standing puzzle why these potentially damaging biases are maintained and evolving to a high level in the human society. Within the framework of evolutionary game theory, we present a simple version of resource competition game in which the coevolution of overconfidence and bluffing is fundamental, which is capable to explain their prevalence in structured populations. Interestingly, bluffing seems apt to evolve to higher level than corresponding overconfidence and in general the former is less resistant to punishment than the latter. Moreover, topological feature of the social network plays an intricate role in the spreading of overconfidence and bluffing. While the heterogeneity of interactions facilitates bluffing, it also increases efficiency of adequate punishment against overconfident behavior. Furthermore, increasing the degree of homogeneous networks can trigger similar effect. We also observed that having high real capability may accommodate both bluffing ability and overconfidence simultaneously.