Implications of Behavioral Rules in Agent-Based Macroeconomics. CESifo Working Paper No. 11411

Dawid, H., Delli Gatti, D., Fierro, L.E. ORCID: https://orcid.org/0000-0002-4378-1375, & Poledna, S. (2024). Implications of Behavioral Rules in Agent-Based Macroeconomics. CESifo Working Paper No. 11411. CESifo , Munich, Germany.

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Abstract

In this paper we examine the role of the design of behavioral rules in agent-based macroeconomic modeling. Based on clear theoretical foundations, we develop a general representation of the behavioral rules governing price and quantity decisions of firms and show how rules used in four main families of agent-based macroeconomic models can be interpreted as special cases of these general rules. We embed the four variations of these rules into a calibrated agent-based macroeconomic framework and show that they all yield qualitatively very similar dynamics in business-as-usual times. However, the impact of demand, cost, and productivity shocks differ substantially depending on which of the four variants of the price and quantity rules are used.

Item Type:	Other
Uncontrolled Keywords:	agent-based macroeconomics, behavioral rules, pricing, forecasting
Research Programs:	Advancing Systems Analysis (ASA) Advancing Systems Analysis (ASA) > Exploratory Modeling of Human-natural Systems (EM)
Depositing User:	Michaela Rossini
Date Deposited:	03 Jan 2025 14:15
Last Modified:	03 Jan 2025 14:15
URI:	https://pure.iiasa.ac.at/20208

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