COPYRIGHT AND USE OF THIS THESIS This thesis must be used in accordance with the provisions of the Copyright Act 1968. Reproduction of material protected by copyright may be an infringement of copyright and copyright owners may be entitled to take legal action against persons who infringe their copyright. Section 51 (2) of the Copyright Act permits an authorized officer of a university library or archives to provide a copy (by communication or otherwise) of an unpublished thesis kept in the library or archives, to a person who satisfies the authorized officer that he or she requires the reproduction for the purposes of research or study. The Copyright Act grants the creator of a work a number of moral rights, specifically the right of attribution, the right against false attribution and the right of integrity. You may infringe the author’s moral rights if you: - fail to acknowledge the author of this thesis if you quote sections from the work - attribute this thesis to another author - subject this thesis to derogatory treatment which may prejudice the author’s reputation For further information contact the University’s Director of Copyright Services sydney.edu.au/copyright The influence of topology and information diffusion on networked game dynamics Dharshana Kasthurirathna A thesis submitted in fulfillment of the requirements for the degree of Doctor of Philosophy Complex Systems Research Group Faculty of Engineering and IT The University of Sydney March 2016 Declaration I hereby declare that this submission is my own work and that, to the best of my knowledge and belief, it contains no material previously published or written by another person nor material which to a substantial extent has been accepted for the award of any other degree or diploma of the University or other institute of higher learning, except where due acknowledgement has been made in the text. Dharshana Kasthurirathna 19th March, 2016. i ii Abstract Dharshana Kasthurirathna Doctor of Philosophy The University of Sydney January 2016 The influence of topology and information diffusion on networked game dynamics This thesis studies the influence of topology and information diffusion on the strategic interactions of agents in a population. It shows that there exists a reciprocal relationship between the topology, information diffusion and the strategic interactions of a population of players. The structure of a population of players is abstracted by the topology and the information flow of the networks of players while the dynamics are denoted by the strategic interactions of the players in the population. While topology represents a static structure, the information flows are used to model a more dynamic and volatile structure of the population. In order to evaluate the influence of topology and information flow on networked game dynamics, strategic games are simulated on populations of players where the players are distributed in a non-homogeneous spatial arrangement. Game theory, network science and information theory are the three pillars of science used to build the underlying theoretical basis in this research. A study of evolution of the coordination of strategic players is the first part of this re- search where the topology or the structure of the population is shown to be critical in defining the coordination among the players. Next, the effect of network topology on the evolutionary stability of strategies is studied in detail. The evolutionary stability of a strategy determines its ability to withstand potentially competitive strategies. Based on the results obtained, it is shown that network topology plays a key role in determining the evolutionary stability of a particular strategy in a population of players. Then, the effect of network topology on the optimum placement of strategies is studied. Using genetic opti- misation, it is shown that the placement of strategies in a spatially distributed population of players is crucial in maximising the collective payoff of the population. This further suggests that the topology of the social structure is critical in determining its networked game dynamics. Exploring further the effect of network topology and information diffusion on networked games, the non-optimal or bounded rationality of players is modelled using topological and directed information flow of the network. While network topology defines a more static form, information flows are used to model a more volatile and dynamic form of the population. These models are then applied to demonstrate how the scale-free and small-world networks emerge in randomly connected populations of players who operate iii under bounded rationality. It is also shown that the strategic interactions with multiple equilibrium states are directly affected by network topology. Thus, the topological and information theoretic interpretations of bounded rationality suggest the topology, infor- mation diffusion and the strategic interactions of socio-economical structures are cyclically interdependent. Acknowledgements As with most PhD journeys, mine had its fair share of hurdles, obstacles and confusions. However, as time passes, one begins to see more clearly as the clouds of uncertainty and unpredictability slowly fade away. I'm both relieved and humbled to reach the end of this long journey, filled with a nervous excitement on what the future might bring. This journey would not have been possible if not for the sacrifices, support and guidance of many people who actively contributed to the successful completion of my thesis. Thanks to them, I feel I made the fullest use of this endeavour of creating new knowledge. I owe my heartfelt gratitude to those who were by my side, patiently and resiliently, throughout this journey. Let me attempt to acknowledge their efforts. First of all, I would like to thank my supervisors, Dr Mahendra Piraveenan and Proffes- sor Liaquat Hossain, for the guidance they provided me throughout this journey. Dr Piraveenan always made sure that I did not fall short of harnessing my full potential, throughout my candidature. His insightful suggestions made sure that I could have pub- lications of significant impact through meaningful research. This thesis would not have materialised if not for his meticulous contributions in shaping and refining the ideas that originated through the countless discussions we had. I would also like to show my grati- tude to Professor Mikhail Prokopenkov, Dr Michael Harre and Dr Shahadat Uddin of the Complex Systems Research group for their invaluable support and guidance that they of- fered to me whenever I reached out to them for help. I'm also grateful to Professor Sanjay Chawla of the School of IT for his comments and suggestions that helped me immensely to formulate my ideas. Further, I was deeply inspired by the epistemological theory of `Con- structive Relativism'[65] by Dr. Nalin De Silva, in forming the philosophical foundation for some of the key concepts discussed in this thesis. The work environment I had in the university was productive and entertaining. I would like to thank Yamuna Subramanium, Upul Senanayake, Gnana Kumar, Arif Khan, Rabi- ul and Andrew Leula for their support and unwavering friendship which enabled me to endure all the hard times. I would fail my duty if I don't thank the administrative staff of the faculty including but not limited to Catherine, Christine, Madelon, Linda and Maria. None of this would have been possible without the lecturers from the University of Moratuwa and University of Colombo, who inspired me to pursue research. My sincere gratitude goes to Dr Chamath Keppetiyagama, who has always been supportive and accessible supervi- sor. I'm grateful to the staff of the Department of Computer Science and Engineering, University of Moratuwa for all they've done for me. Tracing back to my school days, I'm forever grateful to the wonderful panel of teachers I had in Royal College, Colombo. iv v With research, you often tend to live in your own world filled with questions, but time to time, you need to break that bubble to proceed further. For me, my friends have always been that and more. I'm thankful to Rasika Wimalasena, Hiran Milinda and Nilusha Nanayakkara for always providing a home for me whenever I needed one. I'm thankful to Kithsiri Ehelepola for understanding me and supporting me when I needed it the most. During my candidature, many friends helped me and I'm grateful to all of you. You all deserve to be mentioned by name, however I'm unable to do that and I hope you'll forgive me for that. Finally, I cannot thank my loving wife Yashasvi and my dear parents and family enough for standing by me all the time and making it possible for me to pursue this PhD. Had it not been for you, I dread to imagine where I would be and the fact that you are always there for me no matter what, makes me strong. To everyone who helped. Publications The following publications and manuscripts-under-review have resulted from the candida- ture for this degree: 1. D. Kasthurirathna, M. Piraveenan, S. Uddin, \Modelling networked systems using the Topologically Distributed Bounded Rationality Framework", In Review.* 2. D. Kasthurirathna, M. Piraveenan, \Emergence of scale-free characteristics in socio- ecological systems with bounded rationality" Nature - Scientific Reports, Vol. 5, no. 10448, 2015.* 3. D. Kasthurirathna, M. Harre´, M. Piraveenan, “Influence modelling using bounded rationality in social networks" IEEE/ACM International Conference on Advances in Social Networks, pp. 33{40, 2015.* 4. D. Kasthurirathna, M. Piraveenan, M. Harre`, “Influence of topology in the evolution of coordination in complex networks under information diffusion constraints" The European Physical Journal B, vol. 87.1, pp. 1{15, 2014.* 5. D. Kasthurirathna, M. Piraveenan, S. Uddin, \Evolutionary stable strategies in net- worked games: the influence of topology", Journal of Artificial Intelligence and Soft Computing Research, vol.