WAS HAYEK AN ACE?

Nicolaas Vriend

No 272, Computing in Economics and Finance 2000 from Society for Computational Economics

Abstract: In order to address the question whether Hayek might have been an Agent-based Computational Economist (ACE) avant-la-lettre, we consider an ACE model concerning the phenomenon of information contagion. Alongside increasing returns, network externalities, and information cascades, information contagion has been presented in the literature as an explanation for particular patterns of macrobehavior that may seem at odds with the underlying micromotives. But whereas these other explanations have been shown to have a proper microfoundation, information contagion has remained a phenomenon that seemed to occur only when certain ad hoc rules of thumb for individual behavior are assumed. We show how information-contagious behavior can emerge in a coevolutionary process of interacting adaptive agents, how this is related to various Hayekian themes, and how ACE research in general is an application of Hayek's methodological insights.

Date: 2000-07-05
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Citations: View citations in EconPapers (7)

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Working Paper: Was Hayek an Ace? (1999)
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