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Krasnow Institute > Monday Seminars > Abstracts
Very large scale agent systems and emergent macroeconomics Rob Axtell Center for Social Complexity, Krasnow Institute, George Mason Univ, Macroeconomics is the study of economic phenomena in the aggregate. For example, macroeconomists typically posit specific relationships between total savings (by individuals) and aggregate investment (by businesses), or try to infer empirically the relationship between the economy-wide rate of unemployment and and the overall rate of inflation. The existence of such aggregates is not controversial, but the functional relations between aggregates is not well understood, and this has led to the search for "the microfoundations of macroeconomics." Because analytical solution of models involving large numbers of heterogeneous agents is very difficult and possibly intractable, macroeconomic theorizing as practiced today utilizes 'representative agents'--often a single consumer and firm. In this talk I will introduce the idea of large numbers of heterogeneous, boundedly rational agents (consumers and firms) who interact directly with one another, potentially out of equilibrium, and whose cumulative actions give rise to an 'emergent macroeconomy'. In such models aggregates exist (e.g., total savings, overall unemployment rate), but their evolution is determined by economic decisions and actions at the individual level, not on other aggregates. I shall describe barriers and bottlenecks to our goal of realizing a 100 million agent artificial economy 'in silico' using software agents, and speculate on the extent to which 'more is different' in economics.
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