Loyal buyer-seller relationships can arise by design, e.g. when a sellertailors a product to a specific market niche to accomplish the best possiblereturns, and buyers respond to the dedicated efforts the seller makes to meettheir needs. We ask whether it is possible, instead, for loyalty to arisespontaneously, and in particular as a consequence of repeated interaction andco-adaptation among the agents in a market. We devise a stylized model ofdouble auction markets and adaptive traders that incorporates these features.Traders choose where to trade (which market) and how to trade (to buy or tosell) based on their previous experience. We find that when the typical scaleof market returns (or, at fixed scale of returns, the intensity of choice)become higher than some threshold, the preferred state of the system issegregated: both buyers and sellers are segmented into subgroups that arepersistently loyal to one market over another. We characterize the segregatedstate analytically in the limit of large markets: it is stabilized by someagents acting cooperatively to enable trade, and provides higher rewards thanits unsegregated counterpart both for individual traders and the population asa whole.
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