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.
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Paper provided by Queen Mary, University of London, Department of Economics in its series Working Papers with number
403.
Find related papers by JEL classification: B21 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Microeconomics B31 - Schools of Economic Thought and Methodology - - History of Thought: Individuals - - - Individuals B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes
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