chapter  6
Agents in Economic Markets and Games
ByMariam Kiran
Pages 54

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Economics, similar to social science, also uses mathematical concepts to help analyze and predict behavior of its systems. Game theory and economics, however, work hand-in-hand to help study people behavior and introduce concepts of payoff and utility when studying economics systems in research. Economic agent-based modeling is a separate research area used to explain the inner workings of economics. Tesfatsion defines agent-based computational economics (ACE) as "the computational study of economic processes modeled as dynamic systems of interacting agents. Here 'agent' refers broadly to a bundle of data and behavioral methods representing an entity constituting part of a computationally constructed world". Multi-agent systems are essentially players involved in a non-cooperative game scenario. There are two research streams intp which similar agent games can be divided: competitive equilibrium theory and computational mechanism design. In multi-agent systems, the two research streams have to be combined into one, because agents are not only responding to environment conditions but other agents in the system.