News Notes for
Agent-Based Computational Economics (ACE)
February 1998

Prepared by:
Leigh Tesfatsion
Department of Economics
Iowa State University
Ames, Iowa 50011-1070

ACE Web Site Address:

Just a few notes that may be of interest to researchers interested in agent-based computational economics (ACE), the computational study of economies modelled as evolving decentralized systems of autonomous interacting agents. Items of more permanent interest will be retained at the ACE Web site.
ACE news notes are anticipated about every two months during the regular academic year, September-May. Please contact Leigh Tesfatsion ( if you wish to be added or removed from this news list, or if you have any news items you wish to have included in the next ACE news notes. Please do **NOT** use the list address.
Thank you.

ACE Web Site a Scout Report Selection

I am pleased to report that the ACE Web site has been designated as a select learning resource by the Scout Report for Business and Economics (January 29, 1998). From the Report's statement of purpose: "The target audience of the new Scout Report for Business and Economics is faculty, students, staff, and librarians in business and economics. Each biweekly issue offers a selective collection of Internet resources covering topics in the field that have been chosen by librarians and content specialists in the given area of study."

Call for Teaching Links for Computational Economics Web Site

Mario Miranda (Ohio State University) is updating the list of teaching links for computational economics courses on the Web Site of the Society for Computational Economics maintained at Washington University in St. Louis. If you have a Web site dedicated to a computational economics course and would like it to be included in this list, please contact him.

Graduate Fellowships: Models of Socioeconomic Response
to Environmental Change

With support from the National Science Foundation, the University of Cincinnati Interdisciplinary Earth System Science Program announces the availability of several graduate student fellowships, beginning Fall 1998. Each fellow will receive a full tuition scholarship and a monthly stipend, plus funds for research supplies, travel to meetings, and support of a summer sabbatical at an off-campus location. Due to financial support requirements, all fellows must be either U.S. citizens or permanent residents.
While the scope of research topics is broad and flexible, we are specifically seeking one or more individuals with an interest in studying societies as complex adaptive systems - with an emphasis on understanding the relationships between production and consumption in a free-market economy, demographic shifts in population, and enviromental change (e.g., increasing water resource scarcity, or other scenarios associated with long-term climate change). Such studies should lead to new insights about long-term sustainability of populations that consume scarce but renewable resources, and consequently should influence public policy that bears on economy and environment interactions. Within the project scope, there is ample opportunity for students to follow paths of their own creation.
Applications are encouraged from individuals in the physical and natural sciences, economics, and engineering; applicants should demonstrate a high degree of creativity along with strong quantitative skills, and are expected to interact with hydrologists, engineers, and social scientists participating on the research team. We are very interested in receiving applications from women or minority candidates.
For more information on this opportunity, please see our Graduate Fellowships Web site or contact Professor Jim Uber (Environmental Hydrology, 513-556-3643, or Professor Ali Minai (Elec. & Comp. Eng. & Comp. Sci., 513-556-4783,

New ACE Software Links

Note: Pointers to the items below can be found on the software page linked to the ACE Web site home page.

Echo is a simulation tool developed originally by John Holland and Terry Jones at the Santa Fe Institute to investigate mechanisms which regulate diversity and information-processing in complex adaptive systems, i.e., systems comprised of many interacting adaptive agents. Echo agents interact via combat, mating, and trade to develop strategies for ensuring survival in resource-limited environments. The result is complicated networks of interactions and resource flows that resemble species communities in ecological systems. The existing implementation of Echo runs on UNIX workstations and is available via ftp in a tarred compressed file (1085K), together with a documentation file (107K) by Terry Jones.

StarLogoT is a programmable modeling environment for building and exploring multi-level agent-based systems, released free of charge by the Center for Connected Learning and Computer-Based Modeling at Tufts University, Medford, Massachusetts. StarLogoT is one of a class of new "object-based parallel modeling languages" (OBPML). StarLogoT allows the user to control the behavior of thousands of objects in parallel. Each object has its own variable and state. This allows the user to model the behavior of distributed and probabilistic systems, often systems that exhibit complex dynamics. StarLogoT1 is only available for the Macintosh. System requirements include a Macintosh PowerPC, at least 17 MB of free hard drive space, and at least 20 MB of RAM (StarLogo requires at least 13.5 MB for itself). A new version has recently been released that includes several sample models in economics and an extensive set of online help capabilities, among other upgraded features.

Aspen is a microanalytic model simulation of the U.S. economy being developed by Rich Pryor and other researchers at the Sandia National Laboratories in Albuquerque, New Mexico. Aspen uses utility and profit-maximizing economic agents to represent the various decision-making segments of the economy; these agents adapt their behavior according to changing economic conditions and past experience. Aspen is designed to run on Sandia's massively parallel Intel Teraflop computer. Applications are envisioned to economic and market forecasting, impact analysis of tax law and other government policy changes, and impact studies of technology shifts for industry, consumers, or market research firms.

New Book by Robert Axelrod

In his influential book The Evolution of Cooperation (Basic Books, 1984), Robert Axelrod develops a simple yet important theme in the context of a two-person prisoner's dilemma game: namely, the idea that cooperation based on reciprocity can evolve and sustain itself even among a collection of egoistic agents, provided there is sufficient prospect of a long term interaction.
Axelrod has recently published a new book, a sequel to his earlier work: The Complexity of Cooperation: Agent-Based Models of Competition and Collaboration, Princeton University Press, 1997, 0-691-01567-6. Axelrod characterizes the theme of this new book in the following terms:

"(This) book is based on a series of studies that go beyond the basic paradigm of the Prisoner's Dilemma. It includes an analysis of strategies that evolve automatically, rather than by human invention. It also considers strategies designed to cope with the possibility of misunderstandings between the players or misimplementation of a choice. It then expands the basis of cooperation to be more than a choice with a short-run cost and a possible long run gain. It includes collaboration with others to build and enforce norms of conduct, to win a war or to impose an industrial standard, to build a new organization that can act on behalf of its members, and to construct a shared culture based on mutual influence."

Additional information about this new book, including a table of contents, can be obtained at Axelrod's Web site on Agent-Based Models of Conflict and Cooperation.

Review of Axelrod's Book by Ken Binmore:

In a provocative review of Axelrod's new book appearing in the first issue of the Journal of Artificial Societies and Social Simulation, the noted economist and game theorist Ken Binmore takes Axelrod to task for several perceived failings. In this review, Binmore starts by accepting that Axelrod has made an important contribution to game theory; but he qualifies this assessment as follows:

"(This important contribution) has nothing to do with the particular strategy TIT-FOR-TAT nor with the mechanisms that sustain any of the other equilibria in the indefinitely repeated Prisoners' Dilemma. He did us the service of focusing our attention on the importance of evolution in selecting an equilibrium from the infinitude of possibilities whose existence is demonstrated by the folk theorem."

Binmore then goes on to argue that Axelrod engages in misleading generalization by reiterating his claim, originally made in The Evolution of Cooperation, that TIT-FOR-TAT embodies the essential features of a successful strategy for the indefinitely repeated Prisoners' Dilemma and provides a suitable paradigm for human co-operation in a much wider range of contexts. Binmore's criticism takes two basic forms: (a) He argues that several of the key conclusions that Axelrod draws from simulations turn out not to be robust to modifications of his experimental design, such as an increase in the number of iterations or a change in the initial conditions that puts the multi-agent system within a different basin of attraction; and (b) he argues that Axelrod has made the mistake, routinely committed by social scientists who use simulation techniques, of ignoring the light that game theory per se can shed on issues such as the evolution of cooperation.

Axelrod's Reply to Binmore's Review:

"Ken Binmore reports in his review of The Complexity of Cooperation that he was irritated by the jacket's claim that I had done groundbreaking work in game theory. That he was irritated is clear enough. The basis for his irritation is not clear since later in the same paragraph he says, `I believe that he did make an important contribution to game theory [by] focusing our attention on the importance of evolution in selecting an equilibrium from the infinitude of possibilities whose existence is demonstrated by the folk theorem.'

The book being reviewed is a sequel to The Evolution of Cooperation. Most of the review actually deals with the first book where I gave theoretical and empirical reasons to support the conclusion that reciprocity is a very robust basis for cooperation among egoists. I invited game theorists from a variety of disciplines to submit the strategy that they believed would do best in the environment composed of others who would be submitting such strategies. Binmore is concerned that in the first round of the tournament, I told the entrants how many moves each game would have. From the point of view of traditional game theory where the players have unlimited rationality, they should defect on the (known) last move, and therefore on the next to last move, and so on back to the first move. (I even gave each entrant a written form of this argument for their consideration.) However, none of the entrants submitted a strategy that always defects. In fact, they were smart to ignore standard game theory reasoning since everyone else did. To the credit of game theory as a discipline, there has been a great deal of work in recent years (including interesting work by Binmore himself) on the implications of relaxing the assumption of unlimited rationality.

The second specific criticism also applies to The Evolution of Cooperation. Binmore is not satisfied with the evidence for the robustness of TIT FOR TAT as an effective strategy for the iterated Prisoner's Dilemma. I offered the following: two rounds of the tournament showing TIT FOR TAT succeeded by doing well with a wide variety of other strategies designed by more or less sophisticated people, six variants of the tournament emphasizing different aspects of that environment, and an ecological simulation that demonstrated that TIT FOR TAT would do well in the long run. Moreover, the book under review, The Complexity of Cooperation, offers two more kinds of evidence about the robustness of reciprocity. Chapter 1 shows that in an evolutionary setting with mutation and selection, reciprocity can establish itself from a random start, and Chapter 2 shows that adding a little generosity or contrition can effectively deal with the problems of occasional misunderstanding or misimplementation. There has also been a great deal of empirical research showing that reciprocity is a common and effective strategy in a very wide variety of settings including international politics, and among fish, birds, and monkeys (see R. Axelrod and D. Dion, Science, 9 December 1988).

Binmore ignores all but the first three of the nine parts of the book he is reviewing. In the rest, one will find a concern with empirical reality, including a landscape theory of alliances that successfully accounts for the alignment of European nations in World War II, and the alignment of computer companies in setting standards for UNIX (Chapters 4 and 5). One will also find simulation models of the formation of new political actors (Chapter 6) and the dissemination of cultures (Chapter 7). Computer simulation is indeed a fruitful approach for advancing our understanding of complex social processes."

Other New ACE-Related Books

Note: Cites to the following books can also be found on the annotated ACE syllabus linked to the ACE Web site home page.

New ACE-Related Journals

Note: Pointers to the journals listed below can be found on the journals page linked to the ACE Web site home page.

Computational and Mathematical Organization Theory (CMOT)

CMOT provides an international forum of research that advances organization theory and analysis through the use of computational and mathematical techniques. The journal presents a new perspective on organizational research that extends the traditional mathematical approach to formal organizational theory by including computer simulation, logic, and artificial intelligence.

For more information, visit the CMOT Web site.

Journal of Memetics: Evolutionary Models of Information Transmission (JoM-EMIT)

In 1976, Richard Dawkins invented the word "meme," defining it as the "new replicator," "a unit of cultural transmission, or a unit of imitation." JoM-EMIT is a new peer-reviewed academic journal that seeks to develop the memetic perspective, with space devoted to relevant evolutionary issues and other related topics. It offers a forum where theories and the philosophy of memes and evolution are in the centre, not just at the edge of the issues journals want to cover. Members of the Advisory Board include Gary Cziko, Richard Dawkins, Daniel Dennett, and David Hull.

For more information, visit the JoM-EMIT Web site.

Note: The next two announcements appeared in the February 1998 newsletter of the Program for the Study of Complex Systems at the University of Michigan.

Journal of Complex Systems (JCS):

JCS aims to provide a medium of communication for multidisciplinary approaches, either empirical or theoretical, to the study of complex systems in such diverse fields as biology, physics, engineering, economics, cognitive science and social sciences, so as to promote the cross-fertilization of ideas among all the scientific disciplines having to deal with their own complex systems. By complex system, it is meant a system comprised of a (usually large) number of (usually strongly) interacting entities, processes, or agents, the understanding of which requires the development, or the use of, new scientific tools, nonlinear models, out-of-equilibrium descriptions and computer simulations. Understanding the behavior of the whole from the behavior of its constituent units is a recurring theme in modern science, and is the central topic of JCS.

Papers suitable for publication in JCS should deal with complex systems, from an empirical or theoretical viewpoint, or both, in biology, physics, engineering, economics, cognitive science and social sciences. This list is not exhaustive. Papers should have a cross-disciplinary approach or perspective, and have a significant scientific and technical content.

For further submission information contact Eric Bonabeau, Editor-in-Chief, at bonabeau@ Information regarding subscription should be sent to, attention subscriptions department.

Evolutionary Optimization (EO):

The subject of evolutionary optimization has recently experienced a remarkable growth. New concepts, methods and applications are being continually proposed and exploited to provide efficient tools for solving a variety of optimization problems. The aim of this international journal is to collect and disseminate the progressive body of knowledge on evolutionary optimization techniques and their applications, via a single organized medium. These techniques include Genetic Algorithms, Genetic Programmming, Evolutionary Programming and Evolution Strategies among others, all of which are inspired by restricted models of natural evolution.

EO will be publishing invited papers, original research and review papers and short letters. The journal will also have special issues devoted to relevant topics. Book reviews, forthcoming events and software sections of the journal will report the recent developments and advances in the field.

EO will be published quarterly starting in 1998. For further information please contact Dr. Sourav Kundu at the Kanazawa University

Conference Announcements

Note: A list of pointers to upcoming conferences can be found on the conference page linked to the ACE Web site home page.

Excerpts from a Workshop Summary by Nigel Gilbert
(Department of Sociology, University of Surrey, Guildford, UK)

The Workshop on the Potential of Computer Simulation for the Social Sciences, with forty six participants, was held January 14-15, 1998, at the University of Surrey by the Centre for Research on Simulation in the Social Sciences (CRESS), sponsored by the UK Economic and Social Research Council. The aim of the workshop was to review the opportunities for simulation-based research and, especially, to publicise and encourage the development of such research within the UK.

Workshop speakers included Klaus Troitzsch (origins, prospects, and purposes of social science simulation), Scott Moss (computational environments for addressing alternative policy strategies), Kathleen Carley (analysis of organizations as complex and adaptive), Rainer Hegselmann (studying social processes by cellular automata), Rosaria Conte (the PART-NET system for modelling agents with internal cognitive structure), and Richard Eiser (a connectionist theory of attitudes and social influence), among others. A more detailed report on this workshop can be found at the workshop Web site.

Additional ACE-Related Web Sites

Note: Pointers to the following Web sites are included on the "other ACE-related Web sites" page linked to the ACE Web site home page.

Reminder: News Items Requested for ACE News Notes and Complexity

Just a reminder to send me ( any news items that you would like to have considered for inclusion in the ACE news notes and/or the Complexity-at-Large section of the John Wiley journal Complexity. Thanks.

Copyright 1998 Leigh Tesfatsion. All Rights Reserved.