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534
Agent-based computational economics: Growing economies from the bottom-up
- Artificial Life
, 2002
"... Abstract: Agent-based computational economics (ACE) is the computational study of economies modeled as evolving systems of autonomous interacting agents. Thus, ACE is a specialization to economics of the basic complex adaptive systems paradigm. This study outlines the main objectives and defining ch ..."
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Cited by 192 (5 self)
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Abstract: Agent-based computational economics (ACE) is the computational study of economies modeled as evolving systems of autonomous interacting agents. Thus, ACE is a specialization to economics of the basic complex adaptive systems paradigm. This study outlines the main objectives and defining characteristics of the ACE methodology, and discusses similarities and distinctions between ACE and artificial life research. 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 associated with ACE modeling, as well some potential difficulties. Keywords: Agent-based computational economics; artificial life; learning; evolution of norms; markets; networks; parallel experiments with humans and computational agents; computational laboratories. 1
Inference with an incomplete model of english auctions
- JOURNAL OF POLITICAL ECONOMY
, 2003
"... While English auctions are the most common in practice, their rules typically lack sufficient structure to yield a tractable theoretical model without significant abstractions. Rather than relying on one stylized model to provide an exact interpretation of the data, we explore an incomplete model ba ..."
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Cited by 154 (7 self)
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While English auctions are the most common in practice, their rules typically lack sufficient structure to yield a tractable theoretical model without significant abstractions. Rather than relying on one stylized model to provide an exact interpretation of the data, we explore an incomplete model based on two simple assumptions: bidders neither bid more than their valuations nor let an opponent win at a price they would be willing to beat. Focusing on the symmetric independent private values paradigm, we show that this limited structure enables construction of informative bounds on the distribution function char-acterizing bidder demand, on the optimal reserve price, and on the effects of observable covariates on bidder valuations. If the standard theoretical model happens to be the true model, our bounds collapse to the true features of interest. In contrast, when the true data-gen-erating process deviates in seemingly small ways from that implied by equilibrium in the standard theoretical model, existing methods can yield misleading results that need not even lie within our bounds. We report results from Monte Carlo experiments illustrating the perform-ance of our approach and comparing it to others. We apply our ap-
The Contributions of the Economics of Information to Twentieth
- Century Economics,” Quarterly Journal of Economics
, 2000
"... In the field of economics, perhaps the most important break with the past—one that leaves open huge areas for future work—lies in the economics of information. It is now recognized that information is imperfect, obtaining informa-tion can be costly, there are important asymmetries of information, an ..."
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Cited by 120 (0 self)
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In the field of economics, perhaps the most important break with the past—one that leaves open huge areas for future work—lies in the economics of information. It is now recognized that information is imperfect, obtaining informa-tion can be costly, there are important asymmetries of information, and the extent of information asymmetries is affected by actions of firms and individuals. This recognition deeply affects the understanding of wisdom inherited from the past, such as the fundamental welfare theorem and some of the basic characterization of a market economy, and provides explanations of economic and social phenomena that otherwise would be hard to understand. I.
Competitive analysis of incentive compatible on-line auctions
- Theoretical Computer Science
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Nonparametric Tests for Common Values in First-Price Sealed-Bid Auctions
, 2003
"... We develop tests for common values at first-price sealed-bid auctions. Our tests are nonparametric, require observation only of the bids submitted at each auction, and are based on the fact that the “winner’s curse” arises only in common values auctions. The tests build on recently developed methods ..."
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Cited by 105 (13 self)
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We develop tests for common values at first-price sealed-bid auctions. Our tests are nonparametric, require observation only of the bids submitted at each auction, and are based on the fact that the “winner’s curse” arises only in common values auctions. The tests build on recently developed methods for using observed bids to estimate each bidder’s conditional expectation of the value of winning the auction. Equilibrium behavior implies that in a private values auction these expectations are invariant to the number of opponents each bidder faces, while with common values they are decreasing in the number of opponents. This distinction forms the basis of our tests. We consider both exogenous and endogenous variation in the number of bidders. Monte Carlo experiments show that our tests can perform well in samples of moderate sizes. We apply our tests to two different types of U.S. Forest Service timber auctions. For unit-price (“scaled”) sales often argued to fit a private values model, our tests consistently fail to find evidence of common values. For “lumpsum” sales, where aprioriarguments for common values appear stronger, our tests yield mixed evidence against the private values hypothesis.
Competitive Generalized Auctions
, 2002
"... We describe mechanisms for auctions that are simultaneously truthful (alternately known as strategy-proof or incentive-compatible) and guarantee high "net" profit. We make use of appropriate variants of competitive analysis of algorithms in designing and analyzing our mechanisms. Thus, we ..."
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Cited by 93 (20 self)
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We describe mechanisms for auctions that are simultaneously truthful (alternately known as strategy-proof or incentive-compatible) and guarantee high "net" profit. We make use of appropriate variants of competitive analysis of algorithms in designing and analyzing our mechanisms. Thus, we do not require any probabilistic assumptions on bids. We present
Market power and efficiency in a computational electricity market with discriminatory double-auction pricing
- IEEE Transactions on Evolutionary Computation
, 2001
"... Abstract-- This study reports experimental market power and efficiency outcomes for a computational wholesale electricity market operating in the short run under systematically varied concentration and capacity conditions. The pricing of electricity is determined by means of a clearinghouse double a ..."
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Cited by 93 (7 self)
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Abstract-- This study reports experimental market power and efficiency outcomes for a computational wholesale electricity market operating in the short run under systematically varied concentration and capacity conditions. The pricing of electricity is determined by means of a clearinghouse double auction with discriminatory midpoint pricing. Buyers and sellers use a modified Roth-Erev individual reinforcement learning algorithm to determine their price and quantity offers in each auction round. It is shown that high market efficiency is generally attained, and that market microstructure is strongly predictive for the relative market power of buyers and sellers, independently of the values set for the reinforcement learning parameters. Results are briefly compared against results from an earlier study in which buyers and sellers instead engage in social mimicry learning via genetic algorithms. Index Terms – Wholesale electricity market, restructuring, repeated double auction, market power, efficiency, concentration, capacity, individual reinforcement learning, genetic algorithm social learning, agent-based computational economics. I.
Semantic Web Support for the Business-to-Business E-Commerce Lifecycle
, 2002
"... ... widespread, standardisation of ontologies, message content and message protocols will be necessary. In this paper, we present a lifecycle of a business-to-business e-commerce interaction, and show how the Semantic Web can support a service description language that can be used throughout this li ..."
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Cited by 91 (4 self)
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... widespread, standardisation of ontologies, message content and message protocols will be necessary. In this paper, we present a lifecycle of a business-to-business e-commerce interaction, and show how the Semantic Web can support a service description language that can be used throughout this lifecycle. By using DAML+OIL, we develop a service description language sufficiently expressive and flexible to be used not only in advertisements, but also in matchmaking queries, negotiation proposals and agreements. We also identify which operations must be carried out on this description language if the B2B lifecycle is to be fully supported. We do not propose specific standard protocols, but instead argue that our operators are able to support a wide variety of interaction protocols, and so will be fundamental irrespective of which protocols are finally adopted.
