Agent-based modeling for decision making in economics under uncertainty

Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), 2016, vol. 10, No 2016-6, 33 pages

Abstract: Ever since the emergence of economics as a distinct scientific discipline, policy makers have turned to economic models to guide policy interventions. If policy makers seek to enhance growth of an open capitalist economy, they have to take into account, firstly, the uncertainties, inefficiencies, and market failures faced by the agents in the economy, and, secondly, the activities, network structure, and interactions in the innovation and production system. The authors discuss ins-and-outs of developing and using (encompassing and empirically calibrated) agent-based models for (i) abductive theorizing about causes for empirical realities, and (ii) evaluating effects of policy interventions. To ensure that derived policies are suitable to intervene in the real world and not just the stylization of it, they discuss validity and operationalization of agent-based models as well as interpretation of simulation results.

Keywords: Decision making; uncertainty; rationality; agent-based model; policy instrument; innovation economics; Schumpeter (search for similar items in EconPapers)
JEL-codes: B52 C63 D81 O32 P10 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (6)

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Working Paper: Agent-based modeling for decision making in economics under uncertainty (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifweej:20166

DOI: 10.5018/economics-ejournal.ja.2016-6

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