EconPapers    
Economics at your fingertips  
 

Uncertainty, rationality and complexity in a multi-sectoral dynamic model: The dynamic stochastic generalized aggregation approach

Michele Catalano () and Corrado Di Guilmi ()

Journal of Economic Behavior & Organization, 2019, vol. 157, issue C, 117-144

Abstract: The paper proposes an innovative approach for the analytical solution of agent-based models. The approach is termed dynamic stochastic generalized aggregation (DSGA) and is tested on a macroeconomic model articulated in a job and in a goods markets with a large number of heterogeneous and interacting agents (namely firms and workers). The agents heuristically adapt their expectations by interpreting the signals from the market and give rise to macroeconomic regularities. The model is analytically solved in two different scenarios. In the first, the emergent properties of the system are determined uniquely by the myopic behavior of the agents while, in the second, a social planner quantifies the optimal number of agents adopting a particular strategy. The integration of the DSGA approach with intertemporal optimal control allows the identification of multiple equilibria and their qualitative classification.

Keywords: Aggregation; Uncertainty; Opinion dynamics; Master equation; Optimal control (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167268117302809
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Uncertainty, rationality and complexity in a multi sectoral dynamic model: the Dynamic Stochastic Generalized Aggregation approach (2016) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:157:y:2019:i:c:p:117-144

Access Statistics for this article

Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.

More articles in Journal of Economic Behavior & Organization from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2019-10-11
Handle: RePEc:eee:jeborg:v:157:y:2019:i:c:p:117-144