Autonomous Agents and Economic Complexities: A Philosophical Excursion

Please cite the paper as:
Greg Hill, (2017), Autonomous Agents and Economic Complexities: A Philosophical Excursion, World Economics Association (WEA) Conferences, No. 2 2017, Economic Philosophy: Complexities in Economics, 2nd October to 30th November 2017

Abstract

This paper develops a conception of autonomous agents who, lacking the ready-made and complete list of possible states afforded their DSGE counterparts, must envision their own ―state space.‖ Such agents can and must do more than perform constrained optimization exercises; they must also imagine, evaluate, and choose among alternative courses of action. Autonomous agents of this kind tend to hold diverse beliefs about the factors determining the economy‘s past performance, its present state, and the range of its possible trajectories. Insofar as these agents will oftentimes be interacting on the basis of inconsistent beliefs, it‘s reasonable to say that their interactions take place under conditions of general disequilibrium. In developing this alternative scheme of thought, I draw on some ideas from the complexity literature to explain why agents hold diverse views about the economy and to explore how their interactions might play out.

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1 comment

  • Victor A. Beker says:

    Very good paper. Very clearly-written, I enjoyed reading it. I like the interpretation of the Arrow-Debreu model of general equilibrium as a precise description of the almost inconceivable conditions necessary to avoid any “Keynesian problems.” In fact, this was the point of view Hahn taught in his course on general equilibrium at LSE.
    Once diversity of beliefs is introduced results nearer to the real world can be obtained. For instance, this is the case with the quite simple distinction between chartists and fundamentalists, as I mention in my paper for this conference.
    The challenge is whether models based on interacting agents with heterogeneous beliefs is something which can be handled without having to resort to very extreme assumptions.

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