Bankruptcy mechanism based on accumulated payoff and age promotes cooperation in coevolutionary games

¹ School of Science, Beijing University of Posts and Telecommunications - Beijing 100876, PRC
² School of Computer Science and Technology, Jiangsu Normal University - Xuzhou 221116, PRC

Received: 28 February 2024
Accepted: 21 May 2024

Abstract

When individuals or companies are unable to meet their financial obligations, they may undergo the process of bankruptcy and go out of business. At the same time, new companies may arise. In this work, we propose a coevolutionary game model incorporated with bankruptcy. In the model, each agent represents a company. Two factors, accumulated payoff and age, are taken into account to determine its bankrupt probability. We assume two possible bankrupt mechanisms, procedural bankruptcy and age-dependent bankruptcy. Through numerical simulations, we show that the bankruptcy can effectively promote cooperation. Moreover, we find the non-monotonic behavior of the cooperation level with the increase of noise intensity in procedural bankruptcy. By investigating the strategy patterns and the distributions of the bankruptcy probabilities for cooperators and defectors, we provide explanations for the promotion of cooperation and the optimization of the cooperation level. This work highlights the positive effects of bankruptcy mechanism on cooperation in the real business world.