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Economics as Distributed Computation

Conference paper

Abstract

In human societies diverse people act purposively with powerful but limited cognitive processes, interacting directly with one another through technologically-facilitated and physically-mediated social networks. Agent-based computational modeling takes these features of humanity—behavioral heterogeneity, bounded rationality, network interactions—at face value, using modern object-oriented programming techniques to create agent populations that have a high degree of verisimilitude with actual populations. This contrasts with mathematical social science, where fantastic assumptions render models so cartoon-like as to beg credibility—stipulations like identical agents (or a single ‘representative’ agent), omniscient agents (who accurately speculate about other agents), Nash equilibrium (macro-equilibrium arising from agent-level equilibrium) and even the denial of direct agent-agent interaction (as in general equilibrium theory, where individuals interact only with a metaphorical auctioneer). There is a close connection between agent computing in the positive social sciences and distributed computation in computer science, in which individual processors have heterogeneous information that they compute with and then communicate to other processors. Successful distributed computation yields coherent computation across processors. When such distributed computations are executed by distinct software objects instead of physical processors we have distributed artificial intelligence. When the actions of each object can be interpreted as in its ‘self interest’ we then have multi-agent systems, an emerging sub-field of computer science. Viewing human society as a large-scale distributed system for the production of individual welfare leads naturally to agent computing. Indeed, it is argued that agents are the only way for social scientists to effectively harness exponential growth in computational capabilities.

Keywords

economics distributed computation multi-agent systems 

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Copyright information

© Springer Japan 2003

Authors and Affiliations

  1. 1.Center on Social and Economic DynamicsThe Brookings InstitutionNW Washington

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