The 1st BESLAB Computational and Experimental Economics Summer School
Introduction to Agent-based Modelling
This lecture gives a general motivation and introduction to agent-based modeling in Economics. It briefly discusses the methodological and conceptual foundations of this approach, key aspects of designing and analyzing agent-based economic models and illustrates the approach with well-known examples from the literature.
Dawid, H. (2015), “Modeling the Economy as a Complex System”, in B. Alves Furtado, P.A.M. Sakowski, M.H. Tovolli (Eds.), "Modeling Complex Systems for Public Policies", IPEA, Brasilia, pp. 191-216.
Delli Gatti,D., Fagiolo, G., Gallegati, M., Richiardi, M. and Russo A. (Eds.) (2018), Agent-Based Models in Economics: A Toolkit. Cambridge and New York: Cambridge University Press.
Farmer, D. J., and Foley, D. (2009). “The Economy needs Agent-based Modelling”, Nature 460, 685-686.
Miller, J.H. and S. E. Page (2007), Complex Adaptive Systems: An Introduction to Computational Models of Social Life, Princeton University Press.
Nelson, R. and Winter, S.G. (1982), An Evolutionary Theory of Economic Change, Harvard University Press, Cambridge, Mass.
Schelling, T. (1969), “Models of Segregation”, American Economic Review, 59, 488-493.
Wilensky, U. and W. Rand (2015), “An Introduction to Agent-Based Modelling: Modelling Natural Social, and Engineered Complex Systems with NetLogo”, MIT Press.
This lecture provides an overview over well established agent-based macroeconomic models with particular focus on the foundations of the behavioral rules incorporated in these models. Also issues of empirical grounding and calibration of these models is briefly discussed.
Dawid, H. and Delli Gatti, D. (2018), “Agent-based Macroeconomics, in Hommes C, LeBaron B (Eds.): Handbook of Computational Economics, Vol. 4 - Heterogeneous Agent Models, Amsterdam: Elsevier, p. 63-156.
Assenza, T., Delli Gatti, D. & Grazzini, J. (2015), `Emergent dynamics of a macroeconomic agent based model with capital and credit', Journal of Economic Dynamics and Control, 5-28.
Dawid, H. and P. Harting (2011): “Capturing Firm Behavior in Agent-Based Models of Industry Evolution and Macroeconomic Dynamics," in Applied Evolutionary Economics, Behavior and Organizations, ed. by G. Buenstorf, Edward-Elgar, 103-130.
Dawid, H., Harting, P., van der Hoog, S. & Neugart, M. (2019), A heterogeneous agent macroeconomic model for policy evaluation: Improving transparency and reproducibility, Journal of Evolutionary Economics, 29, 467-538.
Delli Gatti, D., Gaffeo, E., Gallegati, M., Giulioni, G., Palestrini, A. (2008). Emergent Macroeconomics: An Agent-Based Approach to Business Fluctuations. Springer: Berlin.
Delli Gatti D. and J. Grazzini (2020), “Rising to the Challenge: Bayesian Estimation and Forecasting Techniques for Macroeconomic Agent-Based Models“, Journal of Economic Behavior and Organization, 178, 875-902.
Dosi, G., Fagiolo, G. & Roventini, A. (2010), `Schumpeter meeting Keynes: a policy-friendly model of endogenous growth and business cycles', Journal of Economic Dynamics and Control 34, 1748-1767.
Sinitskaya, E. and L. Tesfatsion (2015): “Macroeconomies as constructively rational games," Journal of Economic Dynamics and Control, 61, 152-182.
This lecture introduces the methods of experimental economics with especial attention to computational economics. We will discuss what is an economic experiment (field vs lab experiment), the different areas in experimental economics and behavioral economics, the link between experimental economics, theory and computational work, important design issues. All this will be discussed with the classical Keynesian Beauty Contest game. This introduction is meant to give a quick introduction to those who have never followed an experimental economic course. Prior to the course we will send the participants of the summer school some classical experiments which they can do online.
General literature :
Handbook of Experimental Economics, Vol1 (1996), Vol2 (2016), editors J. Kagel &A. Roth
Camerer, C. (2003), "Behavioral Game Theory," Princeton University Pre2016ss
Friedman, D. and Sunder, S. (1994), Experimental Methods. Cambridge Univ. Press: Chapters 1-2: 1-20..
Smith, V.L. (2002), "Method in Experiment: Rhetoric and Reality." Experimental Economics 5(2): 91-110.
Papers related to the Beauty Contest game
Mauersberger, F. and Nagel, R. (2018). Levels of Reasoning in Keynesian Beauty Contests: A Generative Framework in the Handbook of Computational Economics, Volume 4, Heterogeneous Agents. Editors: Cars Hommes and Blake LeBaron. Amsterdam: North-Holland.
Vincent P. Crawford, Miguel A. Costa-Gomes, and Nagore Iriberri (2012) "Structural Models of Nonequilibrium Strategic Thinking: Theory, Evidence, and Applications," Journal of Economic Literature, 51(1):5–62, 2013.
Antoni Bosch-Domènech , Jose García-Montalvo, Rosemarie Nagel, and Albert Satorra, "One, Two, (Three), Infinity...: Newspaper and Lab Beauty-Contest Experiments", American Economic Review December 92 (5), 2002, pp 1687-1701.