nep-cmp New Economics Papers
on Computational Economics
Issue of 2008‒05‒05
three papers chosen by
Stan Miles
Thompson Rivers University

  1. The Toll of Subrational Trading in an Agent Based Economy By Paolo Pellizzari
  2. Behavioural and Welfare Effects of Basic Income Policies: A Simulation for European Countries. By Ugo Colombino; Marilena Locatelli; Edlira Narazani; Cathal O’Donoghue; Isilda Shima
  3. Time Slot Management in Attended Home Delivery By Agatz, N.A.H.; Campbell, A.; Fleischmann, M.; Savelsbergh, M.W.P.

  1. By: Paolo Pellizzari
    Abstract: In an agent-based exchange economy, we measure the loss of wealth for rational agents due to the presence of varying proportions of subrational (boundedly rational) traders that do not know all the needed parameters. We consider two departures from rationality: M-traders use private, stochastic and unbiased signals to build an estimate of the value of the risky asset; chartists only use the last observed price. The exchange takes place using a realistic continuous double auction. We show by numerical simulations that M-traders? subrational behavior does not reduce the wealth of the rational agents. On the contrary, a sizable fraction of chartists can lead to mispricing of the risky asset and to a reduction of the wealth share of the rational traders. Moreover, as chartists perceive a higher wealth than the others, due to wrong estimates of the fundamental value, their fraction in the market may not dissolve in the long run.
    Keywords: risk sharing; boundedly rationality; cost of subrational trading; agent-based markets
    Date: 2008–03–01
  2. By: Ugo Colombino; Marilena Locatelli; Edlira Narazani; Cathal O’Donoghue; Isilda Shima
    Abstract: In this paper we develop and estimate a microeconometric model of household labour supply for four European countries representative of different economies and welfare policy regimes: Denmark, Italy, Portugal and United Kingdom. We then simulate, under the constraint of constant net tax revenue, the effects of 10 hypothetical tax-transfer reforms which include various alternative versions of a Basic Income policy. We produce various indexes and criteria according to which the reforms can be ranked. It turns out that in every country there are many reforms that can improve upon the current status according to many criteria and that might be “politically” feasible. Overall, the non meanstested policies have a better performance and progressive tax rules are somehow more efficient than the flat tax rules.
    Keywords: Welfare, Basic Income, Simulation
    JEL: D10 D33 E64
    Date: 2008–02
  3. By: Agatz, N.A.H.; Campbell, A.; Fleischmann, M.; Savelsbergh, M.W.P. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University)
    Abstract: Many e-tailers providing attended home delivery, especially e-grocers, offer narrow delivery time slots to ensure satisfactory customer service. The choice of delivery time slots has to balance marketing and operational considerations, which results in a complex planning problem. We study the problem of selecting the set of time slots to offer in each of the zip codes in a service region. The selection needs to facilitate cost-effective delivery routes, but also needs to ensure an acceptable level of service to the customer. We present two fully-automated approaches that are capable of producing high-quality delivery time slot offerings in a reasonable amount of time. Computational experiments reveal the value of these approaches and the impact of the environment on the underlying trade-offs.
    Keywords: e-grocery;home delivery;time slots;vehicle routing;continuous approximation;integer programming
    Date: 2008–04–16

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