The added value of using the ODD Protocol for agent-based modeling in Economics: go for it!

Emiliano Alvarez and Volker Grimm
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Emiliano Alvarez: Universidad de la República
Volker Grimm: Helmholtz Centre for Environmental Research-UFZ)

No 307, Working Papers from Red Nacional de Investigadores en Economía (RedNIE)

Abstract: Agent-based modeling (ABM) is a modeling tool that has increased its use in different sciences as well as in economics. Among othe reasons, this is due to the extension of the complex systems paradigm indifferent sciences and the increase in multidisciplinary work. This phenomenon manifests itself in the social sciences from the realiation that social organizations are interactive systems of multiple agents, with feedback, reflexivity, and non-linear effects on the rest of the system. The way in which information is structured is conditional on the paradigms applied and the problem addressed. Since economies are assumed to becomplex adaptive systems, theories and their representations must be consistent with this principle. Therefore, their modeling must allow for a faithful representation of the problem under analysis while being clearand allowing for analysis and subsequent replication. In this paper, we demonstrate how the ODD (Overview, Design concepts, and Details) Protocol fosters transparency and coherence for economic ABMs. To do so, three published ABMs from economics are taken, analyzing the structure and content of their descriptions, and rewritten according to ODD. It discusses in particular the added value of using ODD and how all this could help to overcome different obstacles to a wider use of Complex Systems and ODD in Economics identified in the preceding literature.

Keywords: DD protocol; Economics; agent-based model; macroeconomics; Schelling model (search for similar items in EconPapers)
Pages: 13 pages
Date: 2024-03
New Economics Papers: this item is included in nep-cmp and nep-hme
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