The central property which emerges in markets is
the price. The central law which rules markets is
the law of supply and demand. A basic agent-based
model for markets should explain how both, the
price and the law of supply and demand, emerge
in competitive markets. It should be simple to
extend such a model to explain bubbles and crashes.
As far as I know, there is no basic model of
markets in general, there are only agent based models
of specific markets, for example stock markets,
financial markets and electricity markets. Perhaps
the law of supply and demand is too simple to justify
such a model?
Epstein and Axtell's Sugarscape is a model where
agents begin to accumulate "wealth" in some form,
but it is more about evolution of societies and less
about market mechanisms and economies.
It would be interesting to apply a basic agent-based
market model to the society of mind. If we consider the
crowd within and the battle of ideas which is going on
inside our minds, can we create an agent-based model
to explain the 'market of information' ? We have a
demand for new or highly emotional stuff, are constantly
supplied with information from the outside, and the price
we have to pay to consume it is attention.
-J.
----- Original Message -----
From: Russ Abbott
To: The Friday Morning Applied Complexity Coffee Group
Sent: Sunday, April 12, 2009 9:00 AM
Subject: [FRIAM] Agent-based market models
Does anyone know of good examples of generic agent-based market economies?
I'm thinking of something as simple as this.
A population consists of agents each of which has certain continuing needs
(such as food, clothing, shelter, Internet access, etc.) to survive. As a
starting point, let's assume that each agent needs one unit of each of N
resources every time period. Let's also assume that each agent is
specialized and is capable of creating enough of one of the needed resources
to satisfy the needs of N agents. (The fact that I used the same N in both
places was intentional.) To keep it simple let's assume that these acts of
creation occur from scratch, i.e., that the creator doesn't need raw
materials, that all that's necessary for an agent to create a needed
resource is that the agent be alive. The agents presumably develop a barter
economy, trading the resources they create for the resources they need to
stay alive. Perhaps markets develop, and perhaps money develops. At this
point the economy should be fairly stable. Each agent creates enough stuff
so that s/he can trade it for what s/he needs to stay live.
Perhaps some of the agents learn how to be more efficient in creating their
resource and begin to accumulate "wealth" in some form. Perhaps the agents
have discretionary desires, which they fill if they have enough resources
left over after meeting their basic needs. Perhaps there are communal
services that are paid for by taxes or memberships. This could become
increasingly elaborate.
It seems to me that models of this sort must have been developed -- perhaps
many times. Does anyone know of any references to this sort of work?
Thanks.
-- Russ Abbott
_____________________________________________
Professor, Computer Science
California State University, Los Angeles
o Check out my blog at http://bluecatblog.wordpress.com/
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