Cover image for Discovering artificial economics : how agents learn and economies evolve
Discovering artificial economics : how agents learn and economies evolve
Batten, David F.
Personal Author:
Publication Information:
Boulder, Colo. : Westview Press, [2000]

Physical Description:
xx, 314 pages : illustrations ; 23 cm
Reading Level:
1250 Lexile.
Format :


Call Number
Material Type
Home Location
Item Holds
HB97.3 .B38 2000 Adult Non-Fiction Central Closed Stacks

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Discovering Artificial Economics is an informal introduction to the ideas of modern systems theory and self-organization as they apply to problems in the economic realm. David Batten interleaves anecdotes and stories with technical discussions, in order to provide the general reader with a good feel for how economies function and change. Using a wealth of examples from evolutionary game theory, to stock markets, to urban and traffic planning, Batten shows how economic agents interact to produce the behavior we have come to recognize as economic life. Despite the book's easy-to-read style, Batten's message is quite profound. Strongly interactive groups of agents can produce unexpected collective behavior, emergent features which are lawful in their own right. These patterns of emergent behavior are the hallmark of a complex, self-organizing economy.Batten discards many traditional axioms of economic behavior. Far from displaying perfectly deductive rationality to achieve a predictable economic equilibrium, his agents face an economy that is open and dynamic. There we find evolution, heterogeneity and instabilities; stochastic and deterministic phenomena; unexpected regularities as well as equally unexpected, large-scale fluctuations. Interacting agents are forced to be intuitive and adaptive, because they must respond to a continuously changing economic landscape. Because complexity theory attempts to study a large number of agents, and their changing interaction patterns, it often gets too difficult for a mathematical solution. Thus, many of the anecdotes and results discussed in the book have emerged from agent-based computer simulations. The message is that the social sciences are poised on the verge of a new scientific era, one in which economists will conduct experiments inside their own computers. Welcome to the new age of Artificial Economics.

Table of Contents

List of Illustrations and Tablesp. ix
Prefacep. xiii
Creditsp. svii
Acknowledgmentsp. xix
1 Chance and Necessityp. 1
"Wetting" the Appetitep. 1
Sandpiles, Self-Organization, and Segregationp. 10
Power Laws and Punctuated Equilibriap. 19
Bulls, Bears, and Fractalsp. 24
Stasis and Morphogenesisp. 29
On Learning Curvesp. 39
2 On the Road to Know-Warep. 45
What Is Knowledge?p. 45
Finding the Road to Know-Warep. 50
The Age of Deceptionp. 53
Seeing the Light at the El Farolp. 62
The Emergence of Cooperationp. 67
Coevolutionary Learningp. 76
3 Sheep, Explorers, and Phase Transitionsp. 81
The Fallacy of Compositionp. 81
Irreducible Interactionsp. 85
Getting Well Connectedp. 92
Sheep and Explorersp. 105
Are You an Inductive Graph Theorist?p. 111
4 The Ancient Art of Learning by Circulatingp. 117
Pirenne's Hypothesisp. 117
The Mees Analysisp. 120
Learning by Circulatingp. 125
Big Buttons and a Critical Threadp. 134
Ephemeral Entrepotsp. 137
5 Networks, Boosters, and Self-Organized Citiesp. 139
The Shortest Network Problemp. 139
Pirenne Again?p. 144
Selective Urban Growthp. 146
One Great Metropolisp. 154
Networking Futuresp. 157
City-Size Distributions Obey Power Lawsp. 162
Artificial Citiesp. 170
6 Traffic Near the Edge of Chaosp. 177
The Driver's Dilemmap. 177
In Whose Best Interests?p. 183
Sheep, Explorers, and Bounded Rationalityp. 187
Cellular Congestionp. 190
Coevolutionary Learning in Congested Trafficp. 195
Edge-of-Chaos Managementp. 200
7 Coevolving Marketsp. 209
Are Stock Markets Efficient?p. 209
Pattern Recognizersp. 213
Scaling the Market's Peaksp. 218
Fibonacci Magicp. 222
Market Moodsp. 229
Reading the Market's Mindp. 233
How Markets Learnp. 241
8 Artificial Economicsp. 247
Limits to Knowledgep. 247
Adaptive Agents and the Science of Surprisep. 250
The New Age of Artificial Economicsp. 257
Growing a Silicon Societyp. 259
Some Final Wordsp. 265
Notesp. 269
Referencesp. 287
Indexp. 297