Implications of Behavioral Rules in Agent-Based Macroeconomics

Herbert Dawid, Domenico Delli Gatti, Luca Fierro and Sebastian Poledna

No 11411, CESifo Working Paper Series from CESifo

Abstract: In this paper we examine the role of the design of behavioral rules in agent-based macroeconomic modeling. Based on clear theoretical foundations, we develop a general representation of the behavioral rules governing price and quantity decisions of firms and show how rules used in four main families of agent-based macroeconomic models can be interpreted as special cases of these general rules. We embed the four variations of these rules into a calibrated agent-based macroeconomic framework and show that they all yield qualitatively very similar dynamics in business-as-usual times. However, the impact of demand, cost, and productivity shocks differ substantially depending on which of the four variants of the price and quantity rules are used.

Keywords: agent-based macroeconomics; behavioral rules; pricing; forecasting (search for similar items in EconPapers)
JEL-codes: C63 E37 (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-cmp, nep-hme and nep-inv
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_11411

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