Agent-Based Modelling in Economics and Business
Economic modeling is the core of most economic analysis, but how can models really help us understand and analyze the economy? How well do equilibrium models, such as the ones taught in most economics lectures, represent the real-world phenomena they try to replicate? What are their strengths and limitations? In light of these questions, the seminar introduces agent-based models (ABMs), a class of computational models that approaches economic questions from a different perspective.
Economic modeling is the core of most economic analysis, but how can models really help us
understand and analyze the economy? How well do equilibrium models, such as the ones taught
in most economics lectures, represent the real-world phenomena they try to replicate? What are
their strengths and limitations?
In light of these questions, the seminar introduces agent-based models (ABMs), a class of
computational models that approaches economic questions from a different perspective. ABMs
treat the economy as a complex adaptive system, where macroeconomic phenomena emerge from
the behavior and interaction of heterogeneous agents. In contrast to equation-based equilibrium
models, ABMs cannot be solved mathematically, but need to be simulated and the output analyzed
ABMs are a flexible research tool that can be applied to many different topics and for various
purposes. The seminar focuses on market dynamics, starting from a standard supply and demand
framework. After implementing a simple market model, assumptions about the structure of the
artificial economy and agents’ behaviors will gradually be loosened to explore ways of modeling
more realistic representations of market interactions.
To implement these models, the seminar utilizes NetLogo, a beginner-friendly software designed
to program ABMs. Students will be introduced to the software and gradually learn how to work
with it over the course of the seminar.
By the end of the semester, students should be able to expand existing NetLogo ABMs or even
program their own small models. After finishing the course, agent-based modeling can further be
used as a research method for Bachelor theses or applied in certain Master modules.
- You understand the purpose of economic modeling and how far models can be used to
understand and analyze economic phenomena.
- You learn how to work with ABMs and how to interpret their results.
- You acquire basic knowledge to implement your own agent-based models.
- You will learn how to use the ABM programming platform NetLogo
You will need good skills in written and spoken English. Some affinity to computers and
programming would be helpful, but no previous coding experience is required.
ORGANIZATION AND ASSESSMENT
The seminar is composed of theoretical sessions, interactive discussions, and programming
exercises. The theoretical parts address the methodology of economic modeling in general and
agent-based modeling in particular. Building on this, the usefulness of different modeling
approaches for explaining economic phenomena will be discussed. Finally, coding tutorials first
introduce the software NetLogo, which is then used to develop different types of market ABMs
together in class.
At the end of the semester, students will be tasked with extending one of the models developed in
the course in teams of 2 - 3 students. The seminar papers will be based on these model extensions.
Apart from the seminar paper, two small coding assignments (“Studienleistungen”) need to be
passed during the semester. These assignments are not graded, but are meant to allow for
practicing the use of NetLogo and receiving feedback on it.
Deadline for the term paper: 14.8.2023
Infomaterial (PDF Download):
Assessment: Term paper (Seminararbeit): 100%
Two ungraded assignments that must be passed during the semester.
Time: Wednesday 12:15 – 13:45 h
For details see schedule in the attached course outline.
Place: GD 03/512
Start: Wednesday, 05.04.2023
It is necessary to register for this module in FlexNow and at the chair, because the number of
places is limited to 15.
The registration procedure at the chair consists of two steps:
- You have to sign in to the Moodle course.
- You have to show up at the first seminar session (05.04.23).
If there are more than 15 applications, we will choose participants randomly.
If there are free places available, you can join the course after the first round of registrations.
The registration phase in FlexNow is: 17.04.2023 – 28.04.2023
Note that the registration and deregistration phase ends on April 28th, so you need to decide
whether you want to participate in the course by then!
All announcements and materials will be shared in the Moodle course (Agent-Based Modeling in
Economics and Business (073261-SoSe23)). No password is required for the registration
in course outline
If you have any questions, you can contact firstname.lastname@example.org.
Vorlesung und Seminar