Models of Human Action

Cosmos + Taxis: Studies in Emergent Order and Organization, Forthcoming

GMU Working Paper in Economics No. 15-34

26 Pages Posted: 30 Apr 2015 Last revised: 8 Oct 2015

See all articles by Peter J. Boettke

Peter J. Boettke

George Mason University - Department of Economics

Vipin P. Veetil

Indian Institute of Technology Madras

Date Written: April 28, 2015

Abstract

Standard modeling procedures treat the behavior of economic variables using stochastic-determinate equations. Two alternatives to this approach arose in the last quarter of the twentieth century: deterministic nonlinear equation models and agent-based models. The class of deterministic nonlinear equation models produce dynamic behavior without exogenous shocks, but these models are populated by agents incapable of self-organizing. Agent-based models, on the other hand, allow us to study interactions between synthetic actors and the phenomena that emerge from these interactions. In so far as economic phenomena — like prices, firms, nation states and business cycles — are products of human action but not human design, agent-based models are a more productive way forward in formal modeling of complex adaptive systems such as a market economy.

Keywords: Complexity, Agent-based Models, Hayek, Self-organizing Systems

JEL Classification: B41, B53

Suggested Citation

Boettke, Peter J. and Veetil, Vipin P., Models of Human Action (April 28, 2015). Cosmos + Taxis: Studies in Emergent Order and Organization, Forthcoming; GMU Working Paper in Economics No. 15-34. Available at SSRN: https://ssrn.com/abstract=2600277 or http://dx.doi.org/10.2139/ssrn.2600277

Peter J. Boettke

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States
703-993-1149 (Phone)
703-993-1133 (Fax)

Vipin P. Veetil (Contact Author)

Indian Institute of Technology Madras

Chennai
India

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