Agent-Based Computational Economics (ACE)
and ACE-Related Topics
- Last Updated: 24July 2007
- Site maintained by:
- Professor of Economics and Mathematics
- Iowa State University
- Ames, Iowa 50011-1070
tesfatsi AT iastate.edu
Agent-Based Computational Economics (ACE) Website
- Some of the materials available for downloading
below are in postscript (ps) or adobe portable document format (pdf); all
others are html documents.
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Robert Axelrod and Leigh Tesfatsion, An On-Line Guide for Newcomers to
Agent-Based Modeling in the Social Sciences
This site provides web support materials (readings and demonstration
software) for Robert Axelrod and Leigh Tesfatsion, "A Guide for Newcomers
to Agent-Based Modeling in the Social Sciences"
(pdf preprint, 46K) ,
in Leigh Tesfatsion and Kenneth L. Judd (Eds.), Handbook of Computational
Economics, Vol. 2: Agent-Based Computational Economics
(Table of Contents,html),
Handbooks in Economics Series, North-Holland, Amsterdam, Spring 2006, to
Brookings Institution (Washington, D.C.) supports a website titled
"The Road to Agent-Based Models"
that provides a brief history of agent-based modelling together with
related web links.
John Duffy, "Review of J. M. Epstein and R. Axtell, Growing Artificial
Societies: Social Science from the Bottom Up"
July 27, 1999. To appear in the Southern Economic Journal.
John Hogan, "From Complexity to Perplexity"
Scientific American, Volume 272, June 1995, pages 74-79.
This controversial article is a rather cynical and caustic view of
the research on complex systems undertaken at the Santa Fe Institute through
the mid-1990s. At the very least, it provides a cautionary note to
researchers regarding the dangers of over-hyping (by media commentators among
others) of new and as-yet unproven methodologies related to the study of
Blake LeBaron, "Agent Based Computational Finance: Suggested Readings
and Early Research"
Journal of Economic Dynamics and Control, Volume 24, Numbers 5-7,
2000, pages 679-702.
Abstract: This paper explores some of the early work in
finance making use of computer simulated markets with individual adaptive
agents. Six papers are summarized in detail, and references are given to
many other studies in this wide-ranging research area. It also addresses
many of the questions that new researchers will face when getting into the
Roger A. McCain (Drexel University, Philadelphia, Pennsylvania), a researcher
active in ACE research, maintains a website titled
Game Theory: An Introductory Sketch
that provides a readable elementary exposition of basic game theory
principles for non-specialists.
Scott E. Page, "Computational Models from A to Z"
Keynote Address to SwarmFest'99, The Anderson School of Management at the
University of California at Los Angeles, March 27-29, 1999.
Author's Abstract: "The growing use of computational models
of social, physical and biological systems raises many questions and
concerns. Platforms such as Swarm enable researchers to construct detailed,
robust computational models. The availability of Swarmlike platforms will
speed the pace of the computational revolution and open new areas of
research. In this brief tongue-in-cheek overview, I discuss twenty-six
topics pertaining to these computational models. Unbelievably, each of the
twenty-six subject headings begins with a different letter! Given this
fortuitous fact, I have chosen to arrange the topics alphabeticaly. Though
containing bits of levity, this paper should be read seriously both as a
social scientist's commentary on a nascent field and as a guide to future
Leigh Tesfatsion, Agent-Based Computational Economics: A Constructive Approach to
in Leigh Tesfatsion and Kenneth L. Judd
(eds.), Handbook of Computational Economics, Volume 2: Agent-Based
(Preface, Contributors, and Abstracts),
Handbooks in Economics Series, North-Holland, Amsterdam, 2006, 904pp.
Abstract: This chapter explores the potential
advantages and disadvantages of Agent-Based Computational Economics (ACE) for
the study of economic systems. General points are concretely illustrated
using an ACE model of a two-sector decentralized market economy. Six issues
are highlighted: Constructive understanding of production, pricing, and
trade processes; the essential primacy of survival; strategic rivalry and
market power; behavioral uncertainty and learning; the role of conventions
and organizations; and the complex interactions among structural attributes,
behaviors, and institutional arrangements.
Leigh Tesfatsion, "Economic Agents and Markets as Emergent Phenomena"
Proceedings of the National Academy of Sciences U.S.A., Vol. 99 (supp.
3), 2002, pp. 7191-7192.
Abstract: A brief overview of recent work in agent-based
computational economics is provided, with a stress on the research areas
highlighted at the NAS Sackler Colloquium session "Economic Agents and
Markets as Emergent Phenomena" held in October 2001 in Irvine, CA.
Leigh Tesfatsion, "Agent-Based Computational Economics: Growing Economies
from the Bottom Up", Artificial Life, Volume 8, Number 1, 2002,
55-82, published by the MIT Press
(pdf preprint,212K) or
Abstract: This study is an extended version of the previous
PNAS overview. The main objectives and defining characteristics of agent-based
computational economics (ACE) are outlined, and similiarities and
distinctions between ACE and artificial life research are clarified. Eight
ACE research areas are identified, and a number of publications in each
area are highlighted for concrete illustration. Open questions and
directions for future ACE research are also considered. The study concludes
with a discussion of the potential benefits of the ACE approach, as well as
some potential difficulties.
"Agent-Based Computational Economics: Modeling
Economies as Complex Adaptive Systems",
Information Sciences 149 (2003), 263-269
This is a much-shortened version of the previous ACE survey, presented
at the 2002 Joint Conference on Information Sciences (JCIS).
"Introduction to the Journal of Economic Dynamics and
Control Special Issue on ACE",
Volume 25, Numbers 3-4, March 2001, pp. 281-293
The published article is available from
Following a brief discussion of ACE, this introduction provides a
synopses of the articles included in the JEDC special issue on ACE.
The Table of Contents (full text and abstracts ) for the
JEDC special issue on ACE (Volume 25 Issue 3-4) can be accessed from
JEDC home page.
"Introduction to the Computational Economics
Special Issue on ACE",
Volume 18, Number 1, October 2001, pp. 1-8
Following a brief discussion of ACE, this introduction provides a
synopses of the articles included in the CE special issue on ACE.
"Guest Editorial for the special issue of the
IEEE Transactions on Evolutionary Computation on Agent-Based
Modelling of Evolutionary Economic Systems",
Volume 5, Number 5, October 2001, pp. 437-441
The published article is downloadable from
A brief overview of agent-based computational economics (ACE) is
provided, followed by synopses of the articles included in the
IEEE-TEC special issue on ACE. Additional readings are also
"Agent-Based Computational Economics: A Brief Guide
to the Literature",
in Jonathan Michie (ed.), Reader's Guide to the
Social Sciences, Volume 1, Fitzroy-Dearborn, London, UK, March 2001
"How Economists Can Get Alife",
pp. 533-564 in W. Brian Arthur, Steven Durlauf, and David Lane (eds.), The
Economy as an Evolving Complex System, II, Santa Fe Institute Studies in
the Sciences of Complexity, Volume XXVII, Addison-Wesley, 1997
Abstract: This study presents a summary overview of the basic
artificial life (alife) paradigm, stressing aspects especially relevant for
the study of decentralized market economies. In particular, recent work on a
Trade Network Game (TNG) framework combining evolutionary game play with
endogenous partner selection is used to illustrate how the alife paradigm
might be specialized to economics. Analytical and simulation work is
reported to show how the TNG is currently being used to study the
evolutionary implications of alternative market structures at three different
levels: individual trade behavior; trade network formation; and social
"How Economists Can Get Alife: An Abbreviated Version"
This is a short summary of the previously cited article that
appeared in Arthur et al. (1997). It includes updated references and updated
"Review of J. M. Epstein and R. Axtell, Growing
Artificial Societies: Social Science from the Bottom Up",
Journal of Economic Literature XXXVI (March 1998), 233-234
Nicolaas Vriend, Rational Behavior and Economic Theory
Journal of Economic Behavior and Organization, Volume 29, 1996,
This article argues that ACE models with adaptive agents fit in well
with the standard economic concept of rationality.
Nicolaas Vriend, "Was Hayek an Ace?"
Southern Economic Journal, 2002, Vol. 68, No. 4, p. 811-840.
"Propositions for the Building of a Quantitative Austrian Modeling: An Answer to Prof. Rizzo and Prof. Vriend"
Working Paper 2007-09, Université Paris-X-Nanterre.
Author's Abstract: "In order to address the question whether
F. A. Hayek might have been an Agent-Based Computational Economist (ACE)
avant-la-lettre, an ACE model concerning the phenomenon of information
contagion is considered. It is shown 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."
Copyright © 2007 Leigh Tesfatsion. All Rights Reserved.