Agent-Based Computational Economics: Growing Economies from the Bottom Up

Abstract

Agent-based computational economics (ACE) is the computational study of economies modeled as evolving systems of autonomous interacting agents. Thus, ACE is a specialization to economics of the basic complex adaptive systems paradigm. This study outlines the main objectives and defining characteristics of the ACE methodology, and discusses the similarities and distinctions between ACE and artificial life research. Eight ACE research areas are identified, and a number of publications in each area are highlighted for concrete illustration. Open questions and directions for further ACE research are also considered. The study concludes with a discussion of the potential benefits associated with ACE modeling, as well as some potential difficulties.

Keywords: Agent-based computational economics, Artificial life, Learning, Evolution of norms, Networks, Computational laboratories

JEL Classification: B4, C0, D0, E0