Editing Computational economics (section)

=== Agent based modelling ===
{{Main|Agent-based model}}

Computational economics uses computer-based [[economic model]]ing to solve analytically and statistically formulated economic problems. A research program, to that end, is [[agent-based computational economics]] (ACE), the computational study of economic processes, including whole [[Economy|economies]], as [[dynamic system]]s of interacting [[Agent (economics)|agents]].<ref name=":23">• Scott E. Page, 2008. "agent-based models," ''The New Palgrave Dictionary of Economics'', 2nd Edition. [http://www.dictionaryofeconomics.com/article?id=pde2008_A000218&edition=current&q=agent-based%20computational%20modeling Abstract]. &nbsp;&nbsp; • Leigh Tesfatsion, 2006. "Agent-Based Computational Economics: A Constructive Approach to Economic Theory," ch. 16, ''Handbook of Computational Economics'', v. 2, [pp. 831-880]. {{doi|10.1016/S1574-0021(05)02016-2}}. &nbsp;&nbsp; • Kenneth L. Judd, 2006. "Computationally Intensive Analyses in Economics," ''Handbook of Computational Economics'', v. 2, ch. 17, pp. [https://books.google.com/books?id=6ITfRkNmKQcC&pg=PA881 881-] 893. Pre-pub [https://www2.econ.iastate.edu/tesfatsi/Judd.finalrev.pdf PDF]. &nbsp;&nbsp; • L. Tesfatsion and K. Judd, ed., 2006. ''Handbook of Computational Economics'', v. 2, ''Agent-Based Computational Economics'', Elsevier. [http://www.elsevier.com/wps/find/bookdescription.cws_home/660847/description#description Description] {{Webarchive|url=https://web.archive.org/web/20120306100156/http://www.elsevier.com/wps/find/bookdescription.cws_home/660847/description#description|date=2012-03-06}} & and chapter-preview [http://www.sciencedirect.com/science?_ob=PublicationURL&_hubEid=1-s2.0-S1574002105X02003&_cid=273377&_pubType=HS&_auth=y&_acct=C000228598&_version=1&_urlVersion=0&_userid=10&md5=e4757b4f65755ed6340a11fee9615200 links]. &nbsp;&nbsp; • [[Thomas J. Sargent]], 1994. ''Bounded Rationality in Macroeconomics'', Oxford. [http://www.oup.com/us/catalog/general/subject/Economics/MacroeconomicTheory/?view=usa&ci=9780198288695 Description] and chapter-preview 1st-page [https://www.questia.com/library/book/bounded-rationality-in-macroeconomics-thomas-j-sargent-by-thomas-j-sargent.jsp links.]</ref> As such, it is an economic adaptation of the [[complex adaptive system]]s [[paradigm]].<ref name=":33">• [[W. Brian Arthur]], 1994. "Inductive Reasoning and Bounded Rationality," ''American Economic Review'', 84(2), pp. [http://www-personal.umich.edu/~samoore/bit885f2011/arthur-inductive.pdf 406-411] {{Webarchive|url=https://web.archive.org/web/20130521145936/http://www-personal.umich.edu/~samoore/bit885f2011/arthur-inductive.pdf|date=2013-05-21}}. &nbsp;&nbsp; • [[Leigh Tesfatsion]], 2003. "Agent-based Computational Economics: Modeling Economies as Complex Adaptive Systems," ''Information Sciences'', 149(4), pp. [http://copper.math.buffalo.edu/urgewiki/uploads/Literature/Tesfatsion2002.pdf 262-268] {{webarchive|url=https://web.archive.org/web/20120426000037/http://copper.math.buffalo.edu/urgewiki/uploads/Literature/Tesfatsion2002.pdf|date=April 26, 2012}}. &nbsp;&nbsp; • _____, 2002. "Agent-Based Computational Economics: Growing Economies from the Bottom Up," ''Artificial Life'', 8(1), pp.55-82. [http://www.mitpressjournals.org/doi/abs/10.1162/106454602753694765 Abstract] and pre-pub [http://www.econ.brown.edu/fac/Peter_Howitt/SummerSchool/Agent.pdf PDF] {{webarchive|url=https://web.archive.org/web/20130514143904/http://www.econ.brown.edu/fac/Peter_Howitt/SummerSchool/Agent.pdf|date=2013-05-14}}.</ref> Here the "agent" refers to "computational objects modeled as interacting according to rules," not real people.<ref name="Page200824"/> Agents can represent social, biological, and/or physical entities. The theoretical assumption of [[mathematical optimization]] by agents in [[Equilibrium (economics)|equilibrium]] is replaced by the less restrictive postulate of agents with [[bounded rationality]] ''adapting'' to market forces,<ref name=":43">• W. Brian Arthur, 1994. "Inductive Reasoning and Bounded Rationality," ''American Economic Review'', 84(2), pp. [http://www-personal.umich.edu/~samoore/bit885f2011/arthur-inductive.pdf 406-411] {{Webarchive|url=https://web.archive.org/web/20130521145936/http://www-personal.umich.edu/~samoore/bit885f2011/arthur-inductive.pdf|date=2013-05-21}}. &nbsp;&nbsp; • [[John H. Holland]] and John H. Miller (1991). "Artificial Adaptive Agents in Economic Theory," ''American Economic Review'', 81(2),  pp. [http://www.santafe.edu/media/workingpapers/91-05-025.pdf 365-370] {{Webarchive|url=https://web.archive.org/web/20110105015853/http://www.santafe.edu/media/workingpapers/91-05-025.pdf|date=2011-01-05}}. &nbsp;&nbsp; • [[Thomas C. Schelling]], 1978 [2006].  ''Micromotives and Macrobehavior'', Norton. [http://books.wwnorton.com/books/978-0-393-32946-9/ Description] {{Webarchive|url=https://web.archive.org/web/20171102093240/http://books.wwnorton.com/books/978-0-393-32946-9/|date=2017-11-02}},  [https://books.google.com/books?id=DenWKRgqzWMC&pg=PA1= preview]. &nbsp;&nbsp; •  [[Thomas J. Sargent]], 1994. ''Bounded Rationality in Macroeconomics'', Oxford. [http://www.oup.com/us/catalog/general/subject/Economics/MacroeconomicTheory/?view=usa&ci=9780198288695 Description] and chapter-preview 1st-page [https://www.questia.com/library/book/bounded-rationality-in-macroeconomics-thomas-j-sargent-by-thomas-j-sargent.jsp links.]</ref> including [[Game theory|game-theoretical]] contexts.<ref name="COMP&GT23">• [[Joseph Y. Halpern]], 2008. "computer science and game theory," ''The New Palgrave Dictionary of Economics'', 2nd Edition.  [http://www.dictionaryofeconomics.com/article?id=pde2008_C000566&edition=current&q=&topicid=&result_number=1 Abstract]. &nbsp;&nbsp; • Yoav Shoham, 2008. "Computer Science and Game Theory," ''Communications of the ACM'',  51(8), pp. [http://www.robotics.stanford.edu/~shoham/www%20papers/CSGT-CACM-Shoham.pdf 75-79] {{Webarchive|url=https://web.archive.org/web/20120426005917/http://www.robotics.stanford.edu/~shoham/www%20papers/CSGT-CACM-Shoham.pdf|date=2012-04-26}}. &nbsp;&nbsp; • [[Alvin E. Roth]], 2002. "The Economist as Engineer: Game Theory, Experimentation, and Computation as Tools for Design Economics," ''Econometrica'', 70(4), pp. [http://kuznets.fas.harvard.edu/~aroth/papers/engineer.pdf 1341–1378] {{webarchive|url=https://web.archive.org/web/20040414102216/http://kuznets.fas.harvard.edu/~aroth/papers/engineer.pdf|date=2004-04-14}}.</ref> Starting from initial conditions determined by the modeler, an ACE model develops forward through time driven solely by agent interactions. The scientific objective of the method is to test theoretical findings against real-world data in ways that permit empirically supported theories to cumulate over time.<ref name=":53">Leigh Tesfatsion, 2006. "Agent-Based Computational Economics: A Constructive Approach to Economic Theory," ch. 16, ''Handbook of Computational Economics'', v. 2, sect. 5, p. 865 [pp. 831-880]. {{doi|10.1016/S1574-0021(05)02016-2}}.</ref>