A Model of Boundedly Rational Consumer Choice - An Agent Based Appraoch
The paper presents an extended version of the consumer choice problem. Different from the standard model, prices are not fixed but arise from Walrasian interactions of total demand and a stylized supply function for each of the goods. Three different types of evolutionary algorithms are set up to answer the question whether agents can learn to solve the problem of extended consumer choice. There are three important answers to this question: a) The quality of the results learned crucially depends on the elasticity of supply, which in turn is shown to be a measure of the degree of state dependency of the economic problem. b) It seems to be relatively easy to adhere to the budget constraint, but relatively difficult to reach an optimum with marginal utility per Dollar being equal for each good. c) Agents equipped with some memory are found to perform notably better than agents without memory.
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- Thomas Riechmann, 1999.
"Learning and behavioral stability An economic interpretation of genetic algorithms,"
Journal of Evolutionary Economics,
Springer, vol. 9(2), pages 225-242.
- Riechmann, Thomas, 1997. "Learning and Behavoiral Stability - An Economic Interpretation of Genetic Algorithms," Hannover Economic Papers (HEP) dp-209, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
- Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
- Riechmann, Thomas, 2001. "Genetic algorithm learning and evolutionary games," Journal of Economic Dynamics and Control, Elsevier, vol. 25(6-7), pages 1019-1037, June.
- Arifovic, Jasmina, 1994. "Genetic algorithm learning and the cobweb model," Journal of Economic Dynamics and Control, Elsevier, vol. 18(1), pages 3-28, January.
- Chris Birchenhall & Nikos Kastrinos & Stan Metcalfe, 1997. "Genetic algorithms in evolutionary modelling," Journal of Evolutionary Economics, Springer, vol. 7(4), pages 375-393.
- Paul M Romer, 1999.
"Increasing Returns and Long-Run Growth,"
Levine's Working Paper Archive
2232, David K. Levine.
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