, Volume 8, Issue 2, pp 211-217
Date: 26 Oct 2012

Major trends in agent-based economics

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Agent-based economics: a short overview

The study of the economy by means of Agent-Based (AB) models is a relatively new field. It dates back to the early 90’s, when the increasing availability of cheap computing power has made possible to undertake the first computationally demanding experiments required to model the interactions of a large number of boundedly rational and heterogeneous agents (for a review, see Tesfatsion and Judd 2006), in an economy characterized by non-equilibrium dynamics and information asymmetries.

The AB approach allows us to build models with a large number of heterogeneous agents, where the resulting aggregate dynamics is not known a priori, and outcomes are not immediately deducible from individual behaviour. This approach is characterized by three main tenets: (i) there is a multitude of objects that interact with each other and with the environment; (ii) objects are autonomous (hence, they are called agents), no central or “top down” control over their beha ...

For valuable comments and without implicating for any errors, we thank participants at the 16th Workshop on Economics and Heterogeneous Interacting Agents, Ancona, June 23–25 (2011). Special thanks to Mauro Gallegati and Stefania Vitali whose detailed comments have been especially useful.