Posts Tagged ‘sociology’
Axelrod (1984) made a major contribution to Game Theory in his book “Evolution of Cooperation” but thirteen years later he, dissatisfied with game theory, moves onto agent based modelling to rework his view of cooperation in his book in 1997 “The complexity of Cooperation: Agent-based Models of Competition and Collaboration”. In a similar move, the Santa Fe Institute in the US was established in 1984 to grapple with complex social issues and used agent based modelling amongst other techniques to “collaborate across disciplines, merging ideas and principles of many fields — from physics, mathematics, and biology to the social sciences and the humanities — in pursuit of creative insights that improve our world”. Additionally, the EU acknowledges the failure of traditional economics so adopts agent based modelling.
Agent based modelling captures the interaction between agents to simulate emergence whether at the physical or social level. NetLogo provides an extensive library of simulations of both physical and social emergence that shows the diversity of application of agent based modelling. These sample simulations can be readily tailored to meet the needs of social scientists. The software is free and there is a thriving enthusiastic community support group.
Why is there a move by a prominent game theorist, the Santa Fe Institute and the EU to agent based modelling? The article Game Theory as Dogma by Professor Kay (2005) discusses ample reasons to search for alternative techniques to model competition and collaboration and emergence in general. For instance,
The trouble with game theory is that it can explain everything. If a bank president was standing in the street and lighting his pants on fire, some game theorist would explain it as rational. (Kay 2005, p. 12)
G8 or G20 Protests and Computable General Equilibrium (CGE) modelling and its Dual Instability Problem
This article discusses why Computable General Equilibrium (CGE) models are important to the G8 or G20 protests and why CGE models are unsuitable for policy analysis for the following two reasons, CGE lacking microfoundations and the dual instability problem.
First, why are CGE models important to the G8 or G20 protests? An example of a global CGE model is the Global Trade Analysis Project (GTAP 2009) coordinated by the Centre for Global Trade Analysis, Department of Agricultural Economics, Purdue University. GTAP (2009) claims that their model provides a common language for global economic analysis; they cite the use of GTAP in three of the five quantitative studies at the 1995 conference of the WTO’s Uruguay Round Agreement and in virtually all the quantitative work for the 1999 Millennium Round of Multilateral Trade. This example indicates the credibility and perceived importance of CGE. Read the rest of this entry »
“This long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again.”
— John Maynard Keynes
A Tract on Monetary Reform (1923), 80.
Traditional economics has failed to predict the knock on effects of the financial crisis says the EU. The Eurace project is designed to remedy this failure, which uses an agent based modelling methodology as an alternative to the rational representative agent model that is a cornerstone of neoclassical economics. The post Progressing from game theory to agent based modelling to simulate social emergence further discusses agent based modelling. Read the rest of this entry »