Johnson and colleagues specified “winners and losers” by making the “agents”, as the individuals are called, repeatedly choose between two rooms. Choosing the room denotes a “trader” buying or selling shares, or a car driver picking one out of two routes home. The room which has the fewest traders in it at the end contains the winners.

Each agent keeps the information on whether he or she is a winner or not to build up “experience”. But if all the agents follow the same trend, they all become losers. Hence, each agent works out the probability of the other agents making a certain decision and adjusts their strategy accordingly. To their surprise, the researchers found that the agents self-segregate themselves into two groups, those that follow extremes and become winners, and those that are cautious and lose. However, the paper notes that successful agents rapidly fluctuate between losing and winning streaks, the equivalent of traders making and losing fortunes in rapid succession.