Ants and crickets: arbitrary saving rates in an agent-based model with infinitely lived-agents

János Vincze () and Gergely Varga ()
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János Vincze: Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences and Department of Mathematical Economics and Economic Analysis, Corvinus University of Budapest
Gergely Varga: Corvinus University of Budapest

No 1504, CERS-IE WORKING PAPERS from Institute of Economics, Centre for Economic and Regional Studies

Abstract: Savings behaviour seems to exhibit heterogeneity across nations, and within nations, too. Large changes in saving rates have been observed in the last decades that can be viewed as signs of the arbitrariness of saving. There is a long tradition in the savings literature that separates people into two groups: those who behave soberly (ants), and those who act in an extremely short-sighted fashion (crickets). A puzzle remains: why does an apparently inferior behavioural pattern persist? Our aim is to provide a model that exhibits the arbitrariness of savings by exploring the two-types idea, and also makes intelligible why both types can coexist in the long run. Our approach consists in setting up an agent-based model starting from a traditional production and factor market framework. The model features an evolutionary mechanism that promotes the behaviour conducive to the highest satisfaction of the consumption goal. Our main findings include the prevalence of non-ergodicity, and the genericity of non-stationarity. The model becomes stationary when the selection pressure is very high, and crickets are eliminated. Though in general ants have somewhat higher per capita consumption than crickets, and are less indebted, we have found cases where the total average consumption is higher with many crickets than without them.

Keywords: saving-consumption puzzles; bounded-rationality; agent-based macromodel (search for similar items in EconPapers)
JEL-codes: E03 E14 E27 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2015-01
New Economics Papers: this item is included in nep-cmp and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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