Getting the Best of Both Worlds? Developing Complementary Equation-Based and Agent-Based Models

Authored by Claudius Graebner, Catherine S E Bale, Bernardo Alves Furtado, Brais Alvarez-Pereira, James E Gentile, Heath Henderson, Francesca Lipari

Date Published: 2019

DOI: 10.1007/s10614-017-9763-8

Sponsors: United Kingdom Engineering and Physical Sciences Research Council (EPSRC) Austrian National Bank

Platforms: No platforms listed

Model Documentation: Mathematical description Other Narrative

Model Code URLs: Model code not found

Abstract

We argue that building agent-based and equation-based versions of the same theoretical model is a fruitful way of gaining insights into real-world phenomena. We use the epistemological concept of models as isolations and surrogate systems as the philosophical underpinning of this argument. In particular, we show that agent-based and equation-based approaches align well when used simultaneously and, contrary to some common misconceptions, should be considered complements rather than substitutes. We illustrate the usefulness of the approach by examining a model of the long-run relationship between economic development and inequality (i.e., the Kuznets hypothesis).
Tags
growth Inequality Dynamics Economics Complexity Social simulation Economic methodology Equation-based models Epistemology Agent-based models