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Projection Of A Heterogenous Agent-Based Production Economy Model To A Closed Dynamics Of Aggregate Variables

Author

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  • KRISTIAN LINDGREN

    (Department of Energy and Environment, Chalmers University of Technology, SE-41296 Gothenburg, Sweden)

  • EMMA JONSON

    (Department of Energy and Environment, Chalmers University of Technology, SE-41296 Gothenburg, Sweden)

  • LIV LUNDBERG

    (Department of Energy and Environment, Chalmers University of Technology, SE-41296 Gothenburg, Sweden)

Abstract

A model framework that describes a simple production economy is presented, in which the micro-dynamics can be projected to a closed dynamics of aggregate variables. The construction is based on an agent-based model with heterogeneity both regarding production characteristics and the strategies agents use to predict future prices as a basis for choosing what to produce. The world is divided into a number of regional markets that collect the locally produced goods and via inter-market trade supply regional demands with goods. We discuss the model features that make it possible to project the agent-based micro-dynamics to a closed form dynamics on the level of regionally aggregate quantities. One advantage of such a projection from a high dimensional agent-based dynamics to a low dimensional dynamical system is that the stability characteristics can be analytically approached, and this is illustrated by a derived condition for when a mix of naive and rational agents can stabilize the system. Some illustrations of the general framework in a model of global agricultural land-use are also given.

Suggested Citation

  • Kristian Lindgren & Emma Jonson & Liv Lundberg, 2015. "Projection Of A Heterogenous Agent-Based Production Economy Model To A Closed Dynamics Of Aggregate Variables," Advances in Complex Systems (ACS), World Scientific Publishing Co. Pte. Ltd., vol. 18(05n06), pages 1-19, August.
    • Handle: RePEc:wsi:acsxxx:v:18:y:2015:i:05n06:n:s0219525915500125
    DOI: 10.1142/S0219525915500125
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    References listed on IDEAS

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