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Agent-Based Models of Organizations

In: Handbook of Computational Economics

Author

Listed:
  • Chang, Myong-Hun
  • Harrington, Joseph Jr.

Abstract

The agent-based approach views an organization as a collection of agents, interacting with one another in their pursuit of assigned tasks. The performance of an organization in this framework is determined by the formal and informal structures of interactions among agents, which define the lines of communication, allocation of information processing tasks, distribution of decision-making authorities, and the provision of incentives. This chapter provides a synthesis of various agent-based models of organizations and surveys some of the new insights that are being delivered. The ultimate goal is to introduce the agent-based approach to economists in a methodological manner and provide a broader and less idiosyncratic perspective to those who are already engaging in this line of work. The chapter is organized around the set of research questions that are common to this literature: (1) What are the determinants of organizational behavior and performance? (2) How does organizational structure influence performance? (3) How do the skills and traits of agents matter and how do they interact with structure? (4) How do the characteristics of the environment--including its stability, complexity, and competitiveness--influence the appropriate allocation of authority and information? (5) How is the behavior and performance influenced when an organization is coevolving with other organizations from which it can learn? (6) Can an organization evolve its way to a better structure?

Suggested Citation

  • Chang, Myong-Hun & Harrington, Joseph Jr., 2006. "Agent-Based Models of Organizations," Handbook of Computational Economics,in: Leigh Tesfatsion & Kenneth L. Judd (ed.), Handbook of Computational Economics, edition 1, volume 2, chapter 26, pages 1273-1337 Elsevier.
  • Handle: RePEc:eee:hecchp:2-26
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    References listed on IDEAS

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    Cited by:

    1. repec:eee:jeborg:v:145:y:2018:i:c:p:34-51 is not listed on IDEAS
    2. Concetta Sorropago, 2012. "Incentive Design and Manager Performances: an ABM Approach," Working papers 008, Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino.
    3. Weisbuch, Gérard & Mangalagiu, Diana & Ben-Av, Radel & Solomon, Sorin, 2008. "Simple models of firms emergence," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 387(21), pages 5231-5238.
    4. Jason Barr & Francesco Saraceno, 2005. "Modeling the Firm as an Artificial Neural Network," Working Papers Rutgers University, Newark 2005-011, Department of Economics, Rutgers University, Newark.
    5. Herbert Dawid & Philipp Harting, 2012. "Capturing Firm Behavior in Agent-based Models of Industry Evolution and Macroeconomic Dynamics," Chapters,in: Evolution, Organization and Economic Behavior, chapter 6 Edward Elgar Publishing.
    6. Francesco Saraceno & Jason Barr, 2008. "Cournot competition and endogenous firm size," Journal of Evolutionary Economics, Springer, vol. 18(5), pages 615-638, October.
    7. Desmarchelier, Benoît & Djellal, Faridah & Gallouj, Faïz, 2013. "Environmental policies and eco-innovations by service firms: An agent-based model," Technological Forecasting and Social Change, Elsevier, vol. 80(7), pages 1395-1408.
    8. Paul L. Borrill & Leigh Tesfatsion, 2011. "Agent-based Modeling: The Right Mathematics for the Social Sciences?," Chapters,in: The Elgar Companion to Recent Economic Methodology, chapter 11 Edward Elgar Publishing.
    9. Desmarchelier, Benoît & Regis, Paulo José & Salike, Nimesh, 2018. "Product space and the development of nations: A model of product diversification," Journal of Economic Behavior & Organization, Elsevier, vol. 145(C), pages 34-51.
    10. Barr, Jason & Saraceno, Francesco, 2009. "Organization, learning and cooperation," Journal of Economic Behavior & Organization, Elsevier, vol. 70(1-2), pages 39-53, May.
    11. repec:spo:wpecon:info:hdl:2441/9832 is not listed on IDEAS
    12. Juan Manuel Larrosa, 2016. "Agentes computacionales y análisis económico," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 18(34), pages 87-113, January-J.
    13. Kočišová, J. & Horváth, D. & Brutovský, B., 2009. "The efficiency of individual optimization in the conditions of competitive growth," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 388(17), pages 3585-3592.
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    15. Friederike Wall, 2016. "Agent-based modeling in managerial science: an illustrative survey and study," Review of Managerial Science, Springer, vol. 10(1), pages 135-193, January.
    16. Bin-Tzong Chie & Shu-Heng Chen, 2014. "Competition in a New Industrial Economy: Toward an Agent-Based Economic Model of Modularity," Administrative Sciences, MDPI, Open Access Journal, vol. 4(3), pages 1-27, July.
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    18. Ladley, Daniel & Wilkinson, Ian & Young, Louise, 2015. "The impact of individual versus group rewards on work group performance and cooperation: A computational social science approach," Journal of Business Research, Elsevier, vol. 68(11), pages 2412-2425.
    19. Friederike Wall, 2016. "Agent-based modeling in managerial science: an illustrative survey and study," Review of Managerial Science, Springer, vol. 10(1), pages 135-193, January.
    20. Stephan Leitner & Friederike Wall, 2015. "Simulation-based research in management accounting and control: an illustrative overview," Journal of Management Control: Zeitschrift für Planung und Unternehmenssteuerung, Springer, vol. 26(2), pages 105-129, August.

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    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques

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