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Getting the Best of Both Worlds? Developing Complementary Equation-Based and Agent-Based Models

Author

Listed:
  • Claudius Gräbner

    (Johannes Kepler University Linz)

  • Catherine S. E. Bale

    (University of Leeds)

  • Bernardo Alves Furtado

    (Institute for Applied Economic Research (Ipea-Brazil))

  • Brais Alvarez-Pereira

    (Villa La Fonte)

  • James E. Gentile

    (Two Six Labs, LLC)

  • Heath Henderson

    (Drake University in Des Moines)

  • Francesca Lipari

    (University of Pennsylvania)

Abstract

We argue that building agent-based and equation-based versions of the same theoretical model is a fruitful way of gaining insights into real-world phenomena. We use the epistemological concept of “models as isolations and surrogate systems” as the philosophical underpinning of this argument. In particular, we show that agent-based and equation-based approaches align well when used simultaneously and, contrary to some common misconceptions, should be considered complements rather than substitutes. We illustrate the usefulness of the approach by examining a model of the long-run relationship between economic development and inequality (i.e., the Kuznets hypothesis).

Suggested Citation

  • Claudius Gräbner & Catherine S. E. Bale & Bernardo Alves Furtado & Brais Alvarez-Pereira & James E. Gentile & Heath Henderson & Francesca Lipari, 2019. "Getting the Best of Both Worlds? Developing Complementary Equation-Based and Agent-Based Models," Computational Economics, Springer;Society for Computational Economics, vol. 53(2), pages 763-782, February.
  • Handle: RePEc:kap:compec:v:53:y:2019:i:2:d:10.1007_s10614-017-9763-8
    DOI: 10.1007/s10614-017-9763-8
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    5. Bernardo A. Furtado & Miguel A. Fuentes & Claudio J. Tessone, 2019. "Policy Modeling and Applications: State-of-the-Art and Perspectives," Complexity, Hindawi, vol. 2019, pages 1-11, February.

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