Agent-based modelling in economics by Lynne Hamill, Nigel Gilbert

By Lynne Hamill, Nigel Gilbert

Agent-based modelling in economics


Lynne Hamill and Nigel Gilbert, Centre for examine in Social Simulation (CRESS), college of Surrey, UK


New equipment of financial modelling were sought end result of the worldwide fiscal downturn in 2008.This particular ebook highlights some great benefits of an agent-based modelling (ABM) procedure. It demonstrates how ABM can simply deal with complexity: heterogeneous humans, families and corporations interacting dynamically. in contrast to conventional equipment, ABM doesn't require humans or companies to optimise or monetary platforms to arrive equilibrium. ABM bargains the way to hyperlink micro foundations on to the macro situation. 


Key features:

  • Introduces the idea that of agent-based modelling and indicates the way it differs from current approaches.
  • Provides a theoretical and methodological reason for utilizing ABM in economics, in addition to sensible recommendation on how one can layout and create the models.
  • Each bankruptcy begins with a quick precis of the correct financial conception after which exhibits the way to observe ABM.
  • Explores either subject matters coated in uncomplicated economics textbooks and present vital coverage subject matters; unemployment, alternate premiums, banking and environmental issues.
  • Describes the versions in pseudocode, permitting the reader to strengthen courses of their selected language.
  • Supported through an internet site that includes the NetLogo versions defined within the book.


Agent-based Modelling in Economics provides scholars and researchers with the talents to layout, enforce, and learn agent-based versions. 3rd 12 months undergraduate, grasp and doctoral scholars, college economists will locate this ebook a useful resource.


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6, and plotting the total against the price to generate that total. In other words, the macro aggregate demand curve has been created from micro assumptions about households’ budgets and utility functions. 4 Assumed budget shares (alphas) for food. 5 Results: distribution of budget shares generated by model (based on a single run using 1000 agents). 6 Results: demand for food based on a Cobb–Douglas utility function (based on a single run of 1000 agents). The impact of price changes on demand is measured by the own‐price elasticity (called ‘own‐price’ to distinguish it from cross‐price elasticities, which measure the effect of a change in the price of one good on the demand for another and which are not used here).

While this may be difficult to follow at first, filtering agentsets in this way can be very powerful and concise. That is all that seems to be needed to allow agents to remember where they have been and to avoid returning to the same stall again. 4). Getting errors such as this one is an almost inevitable part of programming. To find the source of the problem requires working through the program, command by command. It is part of the all‐important process of verification, mentioned previously. 4 A NetLogo runtime error.

The go procedure has to be amended to get the best route through the market stalls and to follow that route: 35 ask shoppers [ 36 let route search-before-buying 37 foreach route [ 38 let stall ? 39 ; go to that stall 40 face stall The rest of the code is the same as before (although we can if we wish use the produce‐ price and buy‐from‐stall reporters to make the code more readable). 7 Running experiments The amount of scanning that agents do to find the cheapest stalls should be correlated with a reduction in the average price that they pay: the more they search, the more likely that they will find the optimum set of prices.

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