Nonlinearity, Bounded Rationality, and Heterogeneity

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.

Expounds on nonlinear economic dynamics, providing an alternative approach that explains the complex dynamical behavior of market economies Goes beyond the neoclassical equilibrium paradigm by focusing on nonlinearity, bounded rationality, and heterogeneity Examines recent developments in agent-based simulation studies as a promising extension of nonlinear economic dynamics

Inhalt
Part I NONLINEAR ECONOMIC DYNAMICS Chapter 1 The Nature and Significance of Nonlinear Economic Dynamics Chapter 2 One-Dimensional Nonlinear Cobweb Model with Adaptive Production Adjustment Chapter 3 Two-Dimensional Nonlinear Cobweb Model with Heterogeneous Producers Chapter 4 N-Dimensional Globally Coupled Map of Nonlinear Cobweb Model Part II AGENT-BASED SIMULATION Chapter 5 From Nonlinear Economic Dynamics to Complexity Economics Chapter 6 Agent-Based Simulation Model of Market Structure Dynamics I Chapter 7 Agent-Based Simulation Model of Market Structure Dynamics II