Papers on economic Agent-Based simulation

Agent-Based Computational Economics: A Constructive Approach to Economic Theory

Leigh Tesfatsion

• Uses Walrasian Auctioneer pricing mechanism: simultaneous auction where each agent calculates its demand for the good at every possible price and submits this to auctioneer.
• ACE works differently than other models: Events driven by agent interactions after initial conditions: going TOWARDS equilibrium rather than starting with one.
• Disadvantages: validating ACE model outcomes against empirical data. An empirically observed outcome might be a low-probability event lying in a relatively small peak of the outcome of distribution for this true data-generating process, or in a thin tail of this distribution.

The ACE Trading World Initial conditions

• 0 to T periods, finite number of profit seeking hash and bean firms, finite number of consumers
• Each firm has positive amount of money and production capacity