Agent (economics)

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Economic agents
)

In

optimization
or choice problem.

For example, buyers (

firms, and governments or central banks as the main types of agents in the economy. Each of these agents may play multiple roles in the economy; households, for example, might act as consumers, as workers, and as voters in the model. Some macroeconomic models distinguish even more types of agents, such as workers and shoppers[1] or commercial banks.[2]

The term agent is also used in relation to principal–agent models; in this case, it refers specifically to someone delegated to act on behalf of a principal.[3]

In agent-based computational economics, corresponding agents are "computational objects modeled as interacting according to rules" over space and time, not real people. The rules are formulated to model behavior and social interactions based on stipulated incentives and information.[4] The concept of an agent may be broadly interpreted to be any persistent individual, social, biological, or physical entity interacting with other such entities in the context of a dynamic multi-agent economic system.

Representative vs. heterogenous agents

An

heterogeneous agent model. Economists often use representative agent models when they want to describe the economy in the simplest terms possible. In contrast, they may be obliged to use heterogeneous agent models when differences among agents are directly relevant for the question at hand.[5] For example, considering heterogeneity in age is likely to be necessary in a model used to study the economic effects of pensions;[6] considering heterogeneity in wealth is likely to be necessary in a model used to study precautionary saving[7] or redistributive taxation.[8]

See also

References

  1. doi:10.1111/j.1465-7295.1980.tb00570.x
    .
  2. doi:10.1016/0304-3932(92)90021-S
    .
  3. The New Palgrave: A Dictionary of Economics
    . Vol. 3. pp. 966–971.
  4. ^ Page, Scott E. (2008). "Agent-based models". The New Palgrave Dictionary of Economics (2nd ed.).
  5. ISBN 978-0-691-04323-4
    .
  6. JSTOR 2677880
    .
  7. S2CID 14047708
    .
  8. doi:10.1111/1468-0262.00293
    .

Further reading
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