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Computer simulations, mathematics and economics


  • Magda Fontana



Economists lise different kinds of computer simulation. However, there is little attention on the theory of simulation, which is considered either a technology or an extension of mathematical theory or, else, a way of modelling that is alternative to verbal description and mathematical models. The paper suggests a systematisation of the relationship between simulations, mathematics and economics. In particular, it traces the evolution of simulation techniques, comments some of the contributions that deal with their nature, and, finally, illustrates with some examples their influence on economie theory. Keywords: Computer simulation, economie methodology, multi-agent programming techniques.
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Suggested Citation

  • Magda Fontana, 2006. "Computer simulations, mathematics and economics," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 53(1), pages 96-123, March.
  • Handle: RePEc:spr:inrvec:v:53:y:2006:i:1:p:96-123
    DOI: 10.1007/BF03029851

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    References listed on IDEAS

    1. D. Colander., 2009. "The Complexity Revolution and the Future of Economics," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 1.
    2. Orcutt, Guy H., 1990. "From engineering to microsimulation : An autobiographical reflection," Journal of Economic Behavior & Organization, Elsevier, vol. 14(1), pages 5-27, September.
    3. Mirowski,Philip, 2002. "Machine Dreams," Cambridge Books, Cambridge University Press, number 9780521772839, May.
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    6. Nicolaas J. Vriend, 2002. "Was Hayek an Ace?," Southern Economic Journal, Southern Economic Association, vol. 68(4), pages 811-840, April.
    7. Tesfatsion, Leigh & Judd, Kenneth L., 2006. "Handbook of Computational Economics, Vol. 2: Agent-Based Computational Economics," Staff General Research Papers Archive 10368, Iowa State University, Department of Economics.
    8. Kirman, Alan, 1989. "The Intrinsic Limits of Modern Economic Theory: The Emperor Has No Clothes," Economic Journal, Royal Economic Society, vol. 99(395), pages 126-139, Supplemen.
    9. Tesfatsion, Leigh, 2006. "Agent-Based Computational Economics: A Constructive Approach to Economic Theory," Handbook of Computational Economics,in: Leigh Tesfatsion & Kenneth L. Judd (ed.), Handbook of Computational Economics, edition 1, volume 2, chapter 16, pages 831-880 Elsevier.
    10. Robert Axelrod, 1997. "Advancing the Art of Simulation in the Social Sciences," Working Papers 97-05-048, Santa Fe Institute.
    11. Hahn, Frank, 1991. "The Next Hundred Years," Economic Journal, Royal Economic Society, vol. 101(404), pages 47-50, January.
    12. Foster, John, 1995. "The impact of the self organisation approach on economic science: why economic theory and history need no longer be mutually exclusive domains," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 39(3), pages 393-398.
    13. Schelling, Thomas C, 1969. "Models of Segregation," American Economic Review, American Economic Association, vol. 59(2), pages 488-493, May.
    14. Holland, John H & Miller, John H, 1991. "Artificial Adaptive Agents in Economic Theory," American Economic Review, American Economic Association, vol. 81(2), pages 365-371, May.
    15. Williamson, Oliver E, 1988. "The Logic of Economic Organization," Journal of Law, Economics, and Organization, Oxford University Press, vol. 4(1), pages 65-93, Spring.
    16. Arifovic, Jasmina, 1996. "The Behavior of the Exchange Rate in the Genetic Algorithm and Experimental Economies," Journal of Political Economy, University of Chicago Press, vol. 104(3), pages 510-541, June.
    17. Robert Axtell & Robert Axelrod & Joshua M. Epstein & Michael D. Cohen, 1995. "Aligning Simulation Models: A Case Study and Results," Working Papers 95-07-065, Santa Fe Institute.
    18. Leigh Tesfatsion, 2002. "Agent-Based Computational Economics," Computational Economics 0203001, EconWPA, revised 15 Aug 2002.
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    Cited by:

    1. Michaelides, Panayotis G. & Belegri-Roboli, Athena & Arapis, Gerasimos, 2009. "Early Nonlinear Modelling in Economic Analysis: The Hicks Model for Greece Revisited," MPRA Paper 67112, University Library of Munich, Germany.
    2. Magda Fontana, 2010. "The Santa Fe Perspective on economics: emerging patterns in the science of complexity," History of Economic Ideas, Fabrizio Serra Editore, Pisa - Roma, vol. 18(2), pages 167-196.
    3. Alessandro Vaglio, 2010. "Economic growth, Koestler cycles and the lock chamber effect," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 57(4), pages 369-393, December.
    4. Fontana, Magda, 2010. "Can neoclassical economics handle complexity? The fallacy of the oil spot dynamic," Journal of Economic Behavior & Organization, Elsevier, vol. 76(3), pages 584-596, December.
    5. Fontana Magda, 2008. "The complexity approach to economics : a Paradigm shift," CESMEP Working Papers 200801, University of Turin.

    More about this item


    C63; B4; A12; computer simulation; economic methodology; multi-agent programming techniques;

    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • B4 - Schools of Economic Thought and Methodology - - Economic Methodology
    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines


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