Was Hayek an Ace?

Queen Mary and Westfield College Working Paper No. 403

34 Pages Posted: 13 Mar 2000

See all articles by Nicolaas J. Vriend

Nicolaas J. Vriend

Queen Mary, University of London - Department of Economics

Date Written: May 1999

Abstract

In order to address the question whether Hayek might have been an Agent-based Computational Economist (ACE) avant-la-lettre, we consider an ACE model concerning the phenomenon of information contagion. Alongside increasing returns, network externalities, and information cascades, information contagion has been presented in the literature as an explanation for particular patterns of macrobehavior that may seem at odds with the underlying micromotives. But whereas these other explanations have been shown to have a proper microfoundation, information contagion has remained a phenomenon that seemed to occur only when certain ad hoc rules of thumb for individual behavior are assumed. We show how information-contagious behavior can emerge in a coevolutionary process of interacting adaptive agents, how this is related to various Hayekian themes, and how ACE research in general is an application of Hayek's methodological insights.

JEL Classification: B21, B31, B41, D11, D83, O33

Suggested Citation

Vriend, Nicolaas J., Was Hayek an Ace? (May 1999). Queen Mary and Westfield College Working Paper No. 403. Available at SSRN: https://ssrn.com/abstract=185650 or http://dx.doi.org/10.2139/ssrn.185650

Nicolaas J. Vriend (Contact Author)

Queen Mary, University of London - Department of Economics ( email )

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