A Model of Boundedly Rational Consumer Choice - An Agent Based Appraoch
AbstractThe paper presents an extended version of the consumer choice problem. Different from the standard model, prices are not fixed but arise from Walrasian interactions of total demand and a stylized supply function for each of the goods. Three different types of evolutionary algorithms are set up to answer the question whether agents can learn to solve the problem of extended consumer choice. There are three important answers to this question: a) The quality of the results learned crucially depends on the elasticity of supply, which in turn is shown to be a measure of the degree of state dependency of the economic problem. b) It seems to be relatively easy to adhere to the budget constraint, but relatively difficult to reach an optimum with marginal utility per Dollar being equal for each good. c) Agents equipped with some memory are found to perform notably better than agents without memory.
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Bibliographic InfoPaper provided by Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät in its series Hannover Economic Papers (HEP) with number dp-232.
Length: 28 pages
Date of creation: May 2000
Date of revision:
consumer choice; evolutionary algorithms; state dependency;
Find related papers by JEL classification:
- C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
- D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
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