The Promises and Perils of Agent-Based Computational Economics
In this paper I analyse the main strengths and weaknesses of agent-based computational models. I first describe how agent-based simulations can complement more traditional modelling techniques. Then, I rationalise the main theoretical critiques against the use of simulation, which point to the following problematic areas: (i) interpretation of the simulation dynamics, (ii) estimation of the simulation model, and (iii) generalisation of the results. I show that there exist solutions for all these issues. Along the way, I clarify some confounding differences in terminology between the computer science and the economic literature.
|Date of creation:||07 Jan 2004|
|Date of revision:|
|Note:||Type of Document - pdf; prepared on WinXP; pages: 28; figures: 2|
|Contact details of provider:|| Web page: http://econwpa.repec.org|
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