Modelling Bounded Rationality in Agent-Based Simulations Using the Evolution of Mental Models
There are many possible ways of modelling economic agents. These traditionally fall into one of two camps, dating from Simon’s distinction between substantive and procedural rationality: this is often characterised as those with bounded rationality and those with no such bounds (although this is not strictly correct, Moss & Sent forthcoming). Although the latter type is more analytically tractable we are interested in the former type.
KeywordsUtility Function Internal Model Economic Agent Modelling Agent Bounded Rationality
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