Advertisement

Nonlinearity, Bounded Rationality, and Heterogeneity

Some Aspects of Market Economies as Complex Systems

  • Tamotsu Onozaki

Table of contents

  1. Front Matter
    Pages i-xiii
  2. Nonlinear Economic Dynamics

    1. Front Matter
      Pages 1-1
    2. Tamotsu Onozaki
      Pages 25-77
    3. Tamotsu Onozaki
      Pages 79-126
  3. Toward Economic Complexity

    1. Front Matter
      Pages 127-127
    2. Tamotsu Onozaki
      Pages 137-158
    3. Tamotsu Onozaki
      Pages 159-174
  4. Back Matter
    Pages 201-220

About this book

Introduction

This book pursues a nonlinear approach in considering both chaotic dynamical models and agent-based simulation models of economics, as well as their dynamical behaviors. Three key concepts arising in this context are “nonlinearity,” “bounded rationality” and “heterogeneity,” which also make up the title of the book. Nonlinearity is the warp that runs throughout all models because systems that exhibit chaotic or other complex behavior in the absence of any exogenous disturbances are absolutely nonlinear. Bounded rationality constitutes the woof, because economic systems do not exhibit complex behavior if all agents are perfectly rational, as is usually assumed in neoclassical economics. Agents who are boundedly rational have to struggle to do their best with limited information and tend to adapt to their economic environment without knowing what is the best. Furthermore, the heterogeneity of firms or consumers dyes the fabric of complex dynamics woven from the warp and woof.

Keywords

Agent-based simulation Bounded rationality Complexity Heterogeneity Nonlinear dynamics

Authors and affiliations

  • Tamotsu Onozaki
    • 1
  1. 1.Faculty of EconomicsRissho UniversityShinagawaJapan

Bibliographic information

Industry Sectors
Finance, Business & Banking