Agent-based computational economics: a short introduction

In a nutshell, agent-based models (ABM) are models, i.e. abstract representation of the reality, in which (i) a multitude of objects interact with each other and with the environment, (ii) the objects are autonomous, i.e. there is no central, or “top down” control over their behavior , and (iii) the outcome of their interaction is numerically computed. Since the objects are autonomous, they are called “agents”. As Leigh Tesfatsion — one the leading researchers in the field and the “mother” of the ACE acronym, which describes the application of ABM to Economics — defines it, Agent-based Computational Economics (ACE) is