Spontaneous emergence of groups and signaling diversity in dynamic networks

We study the coevolution of network structure and signaling behavior. We model agents who can preferentially associate with others in a dynamic network while they also learn to play a simple sender-receiver game. We have four major findings. First, signaling interactions in dynamic networks are sufficient to cause the endogenous formation of distinct signaling groups, even in an initially homogeneous population. Second, dynamic networks allow the emergence of novel hybrid signaling groups that do not converge on a single common signaling system but are instead composed of different yet complementary signaling strategies. We show that the presence of these hybrid groups promotes stable diversity in signaling among other groups in the population. Third, we find important distinctions in information processing capacity of different groups: hybrid groups diffuse information more quickly initially but at the cost of taking longer to reach all group members. Fourth, our findings pertain to all common interest signaling games, are robust across many parameters, and mitigate known problems of inefficient communication.