Agent-Based Computational Economics Using NetLogo

In this introductory chapter, we offer our readers the essential information regarding the field of Agent-based Computational Economics. The development of theory and applications of agent-based systems determined in the last years has brought a real revolution regarding the modelling of complex systems in the field of Economics. The main construction blocks of any agent-based computational model are the following: the set of agents (A), the initializations (I) and the simulation specifications (R). In order to validate an agent-based model, we must follow the following steps: (1) The analysis of pure theories of Economics; (2) Defining the objectives of research and the precise tasks of the model; (3) Building the conceptual model; (4) Validation of conceptual model; (5) Transformation of conceptual model in a computerized model using a software platform; (6) The operational validation of computerized model; (7) The analysis of experiments results and interpretation from an economic point of view.

In this chapter, we describe the multi agent-based computational model of an artificial economy and proceed to the conceptual validation process by describing the observer O with its parameters, variables, procedures and sub-agents T_i and P_xy.

The implementation of the conceptual model using NetLogo is the process of transforming the algorithms described in Chapter 2 in procedures recognized by NetLogo. Any agent-based computational model implementation must be operational validated and verified. A model is considered operational valid to the extent provides a satisfactory range of if it accuracy consistent with the intended application of the model.

In this chapter, we perform five computer experiments that simulate the functioning of the artificial economy with different values for the three control parameters: rs={-2,-1,0,1,2}, NoProducers={1,2,3,.,100}, and NoConsumers={1,2,3,.,100}. Based on these five experiments, we measure five indexes: Herfindahl-Hirschman index, Gini index, mean value of prices for products, mean value of prices for resources, and mean value of obtained production.

In this chapter, we draw the conclusions regarding the evolution of Agentbased Artificial Economy described in Chapter 2, implemented in Chapter 3 using NetLogo, and utilized them for a set of computational experiments in Chapter 4.