Major trends in agent-based economics

2007

Agent-based computational economics (ACE) is the computational study of economies modeled as evolving systems of autonomous interacting agents. Starting from initial conditions, specified by the modeler, the computational economy evolves over time as its constituent agents repeatedly interact with each other and learn from these interactions. ACE is therefore a bottom-up culture-dish approach to the study of economic systems. This chapter discusses the key characteristics and goals of the ACE methodology. Eight currently active research areas are highlighted for concrete illustration. Potential advantages and disadvantages of the ACE methodology are considered, along with open questions and possible directions for future research.

Eastern Economic Journal, 2010

Eastern Economic Journal, 2017

Eastern Economic Association Meetings. Those previous collections used the term agent-based computational economics (ACE), but we will use the more general term agent-based modeling (ABM) given the range of applications and methodology found here. The field continues to grow as economists and others in the social sciences, and a wide array of other disciplines [e.g., Railsback and Grimm (2011)], leverage the benefits of modeling and simulating systems with many adaptive, heterogeneous agents that interact in seemingly simple ways but generate unpredicted or complex system-level outcomes. This collection represents a wide variety of articles on agent-based modeling and focuses on boundedly rational actors, including macroeconomics and even political science, as well as a general consideration of methods in dynamic systems modeling. We open and close with methodology-oriented papers, providing readers with an opportunity to consider the wide range of applications of agent-based simulation, as well as the ability to think about the similarity of the different approaches across topics. Readers can look for aspects highlighted in our opening methodological paper while reading through the three applied papers, considering both the effects of the models' specifications on their results and the methods used to analyze those results. The final paper serves as something of a recap, taking both a general modeling focus and applying it to macroeconomic modeling; its ideas thus ''complete the loop'' in the symposium. The opening contribution, from Leigh Tesfatsion, compares continuous and discrete time equation forms of initial-value state-space models with agent-based approaches [also seen in North and Macal (2007)]. These models do not require the imposition of global coordination, but rather emphasize the historical process. Modeling the actors' (agents') decisions explicitly makes them constructively rational, and can also include the possibility of the anticipation of future events. Global coordination is only added when there is a reason to suppose the need for modeling centralizing institutions or mechanisms for information-sharing. In this paper, specific examples are given for agent auction models of market clearing, ABM versions of DSGE models (discussed in more depth in the symposium's final paper), and the relationship between learning and stock market volatility. Although targeted to graduate students in particular, the recommendations, structure, and formalization of this paper are likely to be highly relevant for scholars throughout the economics discipline and in the many other fields employing agent-based modeling.

Department of Economics, Politics and Public …

Terming a specific approach to economics agent-based may appear paradoxical. Isn't human behavior the foundation of economics - and shouldn't all economic theory be based on agents behavior in some sense? This, at least, is what conventional economic theory has been ...

Meeting the Challenge of Social Problems via Agent-Based Simulation, 2003

While by all standards the macroeconomic system is qualified to be a complex adaptive system, mainstream macroeconomics is not capable of demonstrating this feature. Recent applications of agent-based modeling to macroeconomics define a new research direction, which demonstrates how the macroeconomic system can be modeled and studied as a complex adaptive system. This paper shall review the development of agent-based computational modeling in macroeconomics.

Computational Economics, 2007

This paper addresses the methodological problems of empirical validation in agentbased (AB) economics models and how these are currently being tackled. We first identify a set of issues that are common to all modellers engaged in empirical validation. We then propose a novel taxonomy, which captures the relevant dimensions along which AB economics models differ. We argue that these dimensions affect the way in which empirical validation is carried out by AB modelllers and we critically discuss the main alternative approaches to empirical validation being developed in AB economics. We conclude focusing on a set of (as yet) unresolved issues for empirical validation that require future research.

2006

2012

Are current economic models well equipped to provide useful policy prescriptions? Many economists would have certainly answered, “yes” before the recent Global Recession. This economic crisis has not only demonstrated the importance of banking and financial markets for the dynamics of real economies. It has also revealed the inadequacy of the dominant theoretical framework. Standard models have indeed failed to forecast the advent of the crisis. In addition, they have been unable to indicate a therapy able to restore economic growth (...).

Economies

Dynamic Stochastic General Equilibrium (DSGE) models are widely used as a tool for policy decision-making. These models lost their fame when they could not predict the crisis in 2008 and could not address policy problems afterward. Meanwhile, the Agent-Based Modelling (ABM) approach emerged as an alternative to DSGE models. Between 2000 and 2020, this study examined scholarly research on the topic of ABM in economics. The information is gathered using the SCOPUS database. Numerous bibliometric indicators are provided, including the total number of publications and citations. The study reveals that agent-based modelling in economics research has grown in recent years. The majority of active research occurs in countries such as the United States of America, and collaboration allows researchers to reach out to many more countries. ABM has the potential to be applied in a wide range of economic fields. ABM also necessitates research into its own development to be used to better understa...

2011

This article is the second part of a review of recent empirical and theoretical developments usually grouped under the heading Econophysics. In the first part, we reviewed the statistical properties of financial time series, the statistics exhibited in order books and discussed some studies of correlations of asset prices and returns. This second part deals with models in Econophysics from