Agent based modeling in economics and finance: past, present, and future
Agent-based modeling (ABM) is a novel computational methodology for representing the behavior of individuals in order to study social phenomena. Its use is rapidly growing in many fields. We review ABM in economics and finance and highlight how it can be used to relax conventional assumptions in sta...
| Main Authors: | , |
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| Format: | Journal article |
| Language: | English |
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American Economic Association
2022
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| _version_ | 1797107977290776576 |
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| author | Axtell, R Farmer, J |
| author_facet | Axtell, R Farmer, J |
| author_sort | Axtell, R |
| collection | OXFORD |
| description | Agent-based modeling (ABM) is a novel computational methodology for representing the
behavior of individuals in order to study social phenomena. Its use is rapidly growing in many
fields. We review ABM in economics and finance and highlight how it can be used to relax
conventional assumptions in standard economic models. In economics, ABM has enriched our
understanding of markets, industrial organization, labor, macro, development, environmental and
resource economics, as well as policy. In financial markets, substantial accomplishments include
understanding clustered volatility, market impact, systemic risk and housing markets. We present
a vision for how ABMs might be used in the future to build more realistic models of the economy
and review some of hurdles that must be overcome to achieve this. |
| first_indexed | 2024-03-07T07:23:03Z |
| format | Journal article |
| id | oxford-uuid:8af3b96e-a088-4e29-ba1e-0760222277b7 |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-03-07T07:23:03Z |
| publishDate | 2022 |
| publisher | American Economic Association |
| record_format | dspace |
| spelling | oxford-uuid:8af3b96e-a088-4e29-ba1e-0760222277b72022-10-27T10:08:40ZAgent based modeling in economics and finance: past, present, and futureJournal articlehttp://purl.org/coar/resource_type/c_dcae04bcuuid:8af3b96e-a088-4e29-ba1e-0760222277b7EnglishSymplectic ElementsAmerican Economic Association2022Axtell, RFarmer, JAgent-based modeling (ABM) is a novel computational methodology for representing the behavior of individuals in order to study social phenomena. Its use is rapidly growing in many fields. We review ABM in economics and finance and highlight how it can be used to relax conventional assumptions in standard economic models. In economics, ABM has enriched our understanding of markets, industrial organization, labor, macro, development, environmental and resource economics, as well as policy. In financial markets, substantial accomplishments include understanding clustered volatility, market impact, systemic risk and housing markets. We present a vision for how ABMs might be used in the future to build more realistic models of the economy and review some of hurdles that must be overcome to achieve this. |
| spellingShingle | Axtell, R Farmer, J Agent based modeling in economics and finance: past, present, and future |
| title | Agent based modeling in economics and finance: past, present, and future |
| title_full | Agent based modeling in economics and finance: past, present, and future |
| title_fullStr | Agent based modeling in economics and finance: past, present, and future |
| title_full_unstemmed | Agent based modeling in economics and finance: past, present, and future |
| title_short | Agent based modeling in economics and finance: past, present, and future |
| title_sort | agent based modeling in economics and finance past present and future |
| work_keys_str_mv | AT axtellr agentbasedmodelingineconomicsandfinancepastpresentandfuture AT farmerj agentbasedmodelingineconomicsandfinancepastpresentandfuture |