Agent-Based Models in Economics
A Toolkit

The first step-by-step introduction to the methodology of agent-based models in economics, their mathematical and statistical analysis, and real-world applications.

Domenico Delli Gatti (Edited by), Giorgio Fagiolo (Edited by), Mauro Gallegati (Edited by), Matteo Richiardi (Edited by), Alberto Russo (Edited by)

9781108400046, Cambridge University Press

Paperback / softback, published 22 March 2018

260 pages
22.7 x 15.2 x 1.2 cm, 0.43 kg

'The authors conceive of economies as complex systems of heterogeneous interacting agents with bounded rationality and limited information, and they view agent-based modeling as a necessary tool for the exploration of such systems. In this book the authors provide a comprehensive introduction to agent-based modeling. Although macroeconomic applications are stressed, the coverage of topics such as rationality, behavior, expectations, and learning will be of value for many other applications as well. A particularly welcome aspect of the book is its attention to historical antecedents and its inclusion of chapters devoted to empirical validation and estimation issues.' Leigh Tesfatsion, Iowa State University

In contrast to mainstream economics, complexity theory conceives the economy as a complex system of heterogeneous interacting agents characterised by limited information and bounded rationality. Agent Based Models (ABMs) are the analytical and computational tools developed by the proponents of this emerging methodology. Aimed at students and scholars of contemporary economics, this book includes a comprehensive toolkit for agent-based computational economics, now quickly becoming the new way to study evolving economic systems. Leading scholars in the field explain how ABMs can be applied fruitfully to many real-world economic examples and represent a great advancement over mainstream approaches. The essays discuss the methodological bases of agent-based approaches and demonstrate step-by-step how to build, simulate and analyse ABMs and how to validate their outputs empirically using the data. They also present a wide set of applications of these models to key economic topics, including the business cycle, labour markets, and economic growth.

1. Introduction
2. Agent-based computational economics: what, why, when
3. Agent-based models as recursive systems
4. Rationality, behaviour and expectations
5. Agents' behaviour and learning
6. Interaction
7. The agent-based experiment
8. Empirical validation of agent-based models
9. Estimation of agent-based models
10. Epilogue.

Subject Areas: Mathematical theory of computation [UYA], Mathematical modelling [PBWH], Game theory [PBUD], Econometrics [KCH], Macroeconomics [KCB], Economics [KC]