Real-world economies are open-ended dynamic systems consisting of heterogeneous interacting participants. Human participants are decision-makers who strategically take into account the past actions and potential future actions of other participants. All participants are forced to be locally constructive, meaning their actions at any given time must be based on their local states; and participant actions at any given time affect future local states. Taken together, these essential properties imply real-world economies are locally-constructive sequential games. This paper discusses a modeling approach, (...) Agent-based Computational Economics, that permits researchers to study economic systems from this point of view. ACE modeling principles and objectives are first concisely presented and explained. The remainder of the paper then highlights challenging issues and edgier explorations that ACE researchers are currently pursuing. (shrink)

Sumantra Ghoshal’s condemnation of “bad management theories” that were “destroying good management practices” has not lost any of its salience, after a decade. Management theories anchored in agency theory (and neo-classical economics generally) continue to abet the financialization of society and undermine the functioning of business. An alternative approach (drawn from a more classic institutional, new ecological, and refocused ethical approaches) is reviewed.

This study provides a basic introduction to agent-based modeling (ABM) as a powerful blend of classical and constructive mathematics, with a primary focus on its applicability for social science research. The typical goals of ABM social science researchers are discussed along with the culture-dish nature of their computer experiments. The applicability of ABM for science more generally is also considered, with special attention to physics. Finally, two distinct types of ABM applications are summarized in order to illustrate concretely the duality (...) of ABM: Real-world systems can not only be simulated with verisimilitude using ABM; they can also be efficiently and robustly designed and constructed on the basis of ABM principles. (shrink)

The explosive growth in computational power over the past several decades offers new tools and opportunities for economists. This handbook volume surveys recent research on Agent-based Computational Economics (ACE), the computational study of economic processes modeled as open-ended dynamic systems of interacting agents. Empirical referents for “agents” in ACE models can range from individuals or social groups with learning capabilities to physical world features with no cognitive function. Topics covered include: learning; empirical validation; network economics; social dynamics; financial markets; innovation (...) and technological change; organizations; market design; automated markets and trading agents; political economy; social-ecological systems; computational laboratory development; and general methodological issues. (shrink)

Philosophy of the Social Sciences, Volume 52, Issue 4, Page 207-234, July 2022. According to Searle’s theory of collective intentionality, the fundamental structure of any society can be accounted for in terms of cooperative mechanisms that create deontic relations. This paper criticizes Searle’s standpoint on the ground that, while his social ontology can make sense of simple systems of interaction like symphony orchestras and football teams, the whole coordinative structure of the modern market society cannot be explained solely in terms (...) of we-intentional collaboration and deontic relations. As clarified by Hayek, because of its complexity, this society is a self-organizing system. It results not only from micro-level agreed constraints, but also from an unintended cybernetic mechanism that affects and shapes both its micro and macro dynamics via a circular causality. Searle ignores the coordination problem posed by complexity and provides strawman arguments against the theory of action underpinning the invisible hand explanation of social phenomena. (shrink)

Strategic interactions have been studied extensively in the area of judgment and decision-making. However, so far no specific measure of a decision-maker's ability to be successful in strategic interactions has been proposed and tested. Our contribution is the development of a measure of strategic ability that borrows from both game theory and psychology. Such measure is aimed at providing an estimation of the likelihood of success in many social activities that involve strategic interaction among multiple decision-makers. To construct a reliable (...) measure of strategic ability, that we propose to call ``Strategic Quotient'' (SQ), we designed a test where each item is a game and where, therefore, the individual score obtained depends on the distribution of choices of other decision-makers taking the test. The test is designed to provide information on the abilities related to two dimensions, mentalization and rationality, that we argue are crucial to strategic success, with each dimension being characterized by two main factors. Principal component analysis on preliminary data shows that indeed four factors (two for rationality, two for mentalization) account for strategic success in most of the strategically simpler games of the test. Moreover, two more strategically sophisticated games are inserted in the test and are used to investigate if and to what extent the four factors obtained by simpler games can predict strategic success in more sophisticated strategic interactions. Overall, the collected empirical evidence points to the possibility of building a SQ measure using only simple games designed to capture information about the four identified factors. (shrink)

Mark Blaug played a central role in the development of the field of the methodology of economics, alongside his theoretical work and contributions to the history of economic thought. The purpose, in this article, is to focus on his contributions to the topic of 'formalism in economics', in relation to his methodological commentaries on the Popperian and Lakatosian approaches to the philosophy of science. In Blaugian spirit, the discussion is related to economic theory and draws on the history of economic (...) thought. The argument focuses on the troublesome interface between theoretical and applied economics in mainstream economics. The article includes, as a case study, an assessment of new behavioural economics in Popperian and Lakatosian terms. The conclusion is that such an appraisal exercise—i.e., whether the research programme is progressive or degenerative—is clouded by the interface between the form of empiricism promoted by Popper and Lakatos and the methodological framework of mainstream economics. No conclusion is feasible independent of methodological approach. (shrink)

In this interview, professor Davis discusses the evolution of his career and research interests as a philosopher-economist and gives his perspective on a number of important issues in the field. He argues that historians and methodologists of economics should be engaged in the practice of economics, and that historians should be more open to philosophical analysis of the content of economic ideas. He suggests that the history of recent economics is a particularly fruitful and important area for research exactly because (...) it is an open-ended story that is very relevant to understanding the underlying concerns and concepts of contemporary economics. He discusses his engagement with heterodox economics schools, and their engagement with a rapidly changing mainstream economics. He argues that the theory of the individual is “the central philosophical issue in economics” and discusses his extensive contributions to the issue. (shrink)