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Beyond Experimental Economics: Trading Institutions and Multiagent Systems

Author

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  • Adolfo Lopez Paredes

    (ETS Ingenieros Industriales)

  • Cesáreo Hernández Iglesias

    (ETS Ingenieros Industriales)

Abstract

The ancillary hypothesis of unbounded rationality has dominated economic modelling for several decades. This extreme assumption has been relaxed in a fast growing literature under different headings: new institutional economics, experimental economics (E.E.), or behavioral and evolutionary economics, to name a few. In contrast, agent-based modelling is an active area of research with successful applications in engineering and science. In this paper we discuss the application of MultiAgent Systems (M.A.S.) to handle the social dimension of economics, and we design an appropriate artificial agent who is "resource-bounded-rational". We simulate alternative market trading institutions, which have been extensively studied in E.E. We demonstrate the possibilities of an artificial agent to accommodate alternative market institutions; thus extending the scope and use of E.E., which, so far, needs real agents.

Suggested Citation

  • Adolfo Lopez Paredes & Cesáreo Hernández Iglesias, 1999. "Beyond Experimental Economics: Trading Institutions and Multiagent Systems," Computing in Economics and Finance 1999 1351, Society for Computational Economics.
    • Handle: RePEc:sce:scecf9:1351
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    References listed on IDEAS

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    1. Scott Moss & Helen Gaylard & Steve Wallis & Bruce Edmonds, 1998. "SDML: A Multi-Agent Language for Organizational Modelling," Computational and Mathematical Organization Theory, Springer, vol. 4(1), pages 43-69, March.
    2. Jon Elster, 1998. "Emotions and Economic Theory," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 47-74, March.
    3. Herbert A. Simon, 1991. "Organizations and Markets," Journal of Economic Perspectives, American Economic Association, vol. 5(2), pages 25-44, Spring.
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    Cited by:

    1. Bell, Rosalyn, 2002. "Capturing benefits from water entitlement trade in salinity affected areas: A role for trading houses?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 46(3), pages 1-20.

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