Minority game with local interactions due to the presence of herding behavior

In this Letter we introduce a framework to study local interactions due to the presence of herding behavior in a minority game. The idea behind this approach is to consider that some of the agents who play the game imitate some of their neighbors who are believed to be more informed than themselves. We show that under herding behavior the cooperation between the agents is less efficient than the one which arises in the standard minority game and that the curve volatility of the attendance size as a function of the memory may be a monotone decreasing curve. (c) 2006 Elsevier B.V. All rights reserved.