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on Computational Economics |
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Issue of 2010‒01‒10
nine papers chosen by |
| By: | Paola Tubaro |
| Abstract: | This paper is an overview of "Agent-based Computational Economics (ACE)", an emerging approach to the study of decentralized market economies, in methodological perspective. It summarizes similarities and differences with respect to conventional economic models, outlines the unique methodological characteristics of this approach, and discusses its implications for economic methodology as a whole. While ACE rejoins the reflection on the unintended social consequences of purposeful individual action which is constitutive of economics as a discipline, the paper shows that it complements state-of the-art research in experimental and behavioral economics. In particular, the methods and techniques of ACE have reinforced the laboratory finding that fundamental economic results rely less on rational choice theory than is usually assumed, and have provided insight into the importance of market structures and rules in addition to individual choice. In addition, ACE has enlarged the range of inter-individual interactions that are of interest for economists. In this perspective, ACE provides the economist‘s toolbox with valuable supplements to existing economic techniques rather than proposing a radical alternative. Despite some open methodological questions, it has potential for better integration into economics in the future. |
| Keywords: | Agent-based Computational Economics, Economic Methodology, Experimental Economics. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2009-42&r=cmp |
| By: | Block, C.A.; Collins, J.; Ketter, W.; Weinhardt, C. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University) |
| Abstract: | The energy sector will undergo fundamental changes over the next ten years. Prices for fossil energy resources are continuously increasing, there is an urgent need to reduce CO2 emissions, and the United States and European Union are strongly motivated to become more independent from foreign energy imports. These factors will lead to installation of large numbers of distributed renewable energy generators, which are often intermittent in nature. This trend conflicts with the current power grid control infrastructure and strategies, where a few centralized control centers manage a limited number of large power plants such that their output meets the energy demands in real time. As the proportion of distributed and intermittent generation capacity increases, this task becomes much harder, especially as the local and regional distribution grids where renewable energy generators are usually installed are currently virtually unmanaged, lack real time metering and are not built to cope with power flow inversions (yet). All this is about to change, and so the control strategies must be adapted accordingly. While the hierarchical command-and-control approach served well in a world with a few large scale generation facilities and many small consumers, a more flexible, decentralized, and self-organizing control infrastructure will have to be developed that can be actively managed to balance both the large grid as a whole, as well as the many lower voltage sub-grids. We propose a competitive simulation test bed to stimulate research and development of electronic agents that help manage these tasks. Participants in the competition will develop intelligent agents that are responsible to level energy supply from generators with energy demand from consumers. The competition is designed to closely model reality by bootstrapping the simulation environment with real historic load, generation, and weather data. The simulation environment will provide a low-risk platform that combines simulated markets and real-world data to develop solutions that can be applied to help building the self-organizing intelligent energy grid of the future. |
| Keywords: | energy trading;market simulation;market design;multi-agent systems;complex networks;trading agent competition |
| Date: | 2009–11–25 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureri:1765017337&r=cmp |
| By: | Helber, Stefan; Schimmelpfeng, Katja; Stolletz, Raik |
| Abstract: | This paper treats the problem of setting the inventory level of closed-loop flow lines operating under the constant-work-in-process (CONWIP) protocol. We solve a huge but simple linear program that models an entire simulation run of a closed-loop flow line in discrete time to determine a production rate estimate of the system. This new approach has been introduced in Helber et al. (2008) for open flow lines with limited buffer capacities. In this paper we present numerical results of the method for closed-loop CONWIP flow lines. The first part of the numerical study deals with the accuracy of the method. In the second part, we focus on the relationship between the CONWIP inventory level and the short-term profit. In our numerical investigation we consider both limited and unlimited local buffer capacities between the machines. |
| Keywords: | CONWIP, flow lines, random processing times, performance evaluation, buffer allocation, linear programming, simulation. |
| JEL: | C61 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:han:dpaper:dp-436&r=cmp |
| By: | Ahmed, S. Amer |
| Abstract: | Indian gross domestic product per capita increased rapidly between 2001 and 2006 in a climate of increasing services trade, with the export-oriented services sector responsible for rising shares of growth in gross domestic product. Due to its contribution to aggregate economic growth, there is a great need for empirical examination of the distributional consequences of this growth, especially in light of the challenges in obtaining theoretical solutions that can be generalized. This paper fills this gap in the literature by using a global simulation model to examine how sensitive factor incomes across different industries may have been to the historical changes in India's services exports and imports, and provides insight on the distribution of the national income growth attributable to the expansion of the services industry. Rent on capital in the service sector and wages of all workers would have increased as a result of greater services trade in this period, while income from capital specific to agriculture and manufacturing would have declined. The factors involved with the urban-based services sector may thus benefit from the services trade growth, while the total factor income involved in rural agriculture may decline. |
| Keywords: | Economic Theory&Research,Labor Policies,Trade Policy,ICT Policy and Strategies,Emerging Markets |
| Date: | 2009–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5155&r=cmp |
| By: | Ruud Egging; Franziska Holz; Steven A. Gabriel |
| Abstract: | We provide the description and illustrative results of the World Gas Model, a multi-period complementarity model for the global natural gas market. Market players include producers, traders, pipeline and storage operators, LNG liquefiers and regasifiers as well as marketers. The model data set contains more than 80 countries and regions and covers 98% of world wide natural gas production and consumption. We also include a detailed representation of cross-border natural gas pipelines and constraints imposed by long-term contracts in the LNG market. The Base Case results of our numerical simulations show that the rush for LNG observed in the past years will not be sustained throughout 2030 and that Europe will continue to rely on pipeline gas for a large share of its imports and consumption. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp959&r=cmp |
| By: | Jingliang Xiao; Glyn Wittwer |
| Abstract: | We use a dynamic CGE model of China with a financial module and sectoral detail to examine the real and nominal impacts of a nominal exchange rate appreciation alone, fiscal policy alone and a combined fiscal and monetary package to redress China's external imbalance. The exchange rate policy alone is ineffective in both the short run and long run at reducing China's current account surplus. Fiscal policy is less effective than a combination of fiscal and monetary policy in reducing the surplus. |
| Keywords: | dynamic financial CGE, foreign reserves, trade surplus, monetary policy, fiscal policy |
| JEL: | D58 E52 E62 F31 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:cop:wpaper:g-192&r=cmp |
| By: | Fabian Kindermann |
| Abstract: | This paper studies the long-run macroeconomic, distributional and welfare effects of tuition policy and student loans. We therefore form a rich model of risky human capital investment based on the seminal work of Heckman, Lochner and Taber (1998). We extend their original model by variable labor supply, borrowing constraints, idiosyncratic wage risk, uncertain life-span, and multiple schooling decisions. This allows us to build a direct link between students and their parents and make the initial distribution of people over different socio-economic backgrounds endogenous. Our simulation indicate that privatization of tertiary education comes with a vast reduction in the number of students, an increase in the college wage premium and longrun welfare losses of around 5 percent. Surprisingly, we find that from privatization of tertiary education, students are better off compared to workers from other educational classes, since the college wage premium nearly doubles. In addition, our model predicts that income contingent loans on which students don’t have to pay interest, improve the college enrolment situation for agents from all kinds of backgrounds. |
| Keywords: | public vs. private education, schooling choice, human capital investment, idiosyncratic uncertainty |
| JEL: | I22 J24 H52 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp246&r=cmp |
| By: | Rodica Loisel (CIRED - Centre international de recherche sur l'environnement et le développement - CIRAD : UMR56 - CNRS : UMR8568 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole Nationale des Ponts et Chaussées - Ecole Nationale du Génie Rural des Eaux et Forêts) |
| Abstract: | This study simulates a CO2 permit market in Romania using a dynamic general equilibrium model. The carbon constraint is set at 20.7% below the reference emissions level for sectors eligible according to the EU-ETS (European Union Emission Trading Scheme). Free permit distribution enhances growth despite a severe emissions cap, because environmental regulation stimulates structural changes (Porter, 1991). That is, grandfathering allows sectors additional resources to invest in developing technologies, but it also raises the CO2 abatement costs because of energy rebound effects from enhanced growth. Results under endogenous growth (Romer, 1990) are very similar to those obtained under an exogenous growth scenario (Ramsey, 1928), as the substitution effects are responsible for the majority of variations; in addition, Romanian research activities are too modest to significantly impact this system. The abatement cost per unit of GDP is higher under endogenous growth, as spillover effects reduce incentives to invest. Technological diffusion continues to have a positive impact on economic growth, which counterbalances the free-riding attitude adopted by some energy-intensive sectors, such as glass and cement. |
| Keywords: | tradable permits, Romania, endogenous/exogenous growth, spillover effects. |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00441491_v1&r=cmp |
| By: | Klimm, Max (Technische Universität Berlin); Weibull, Jörgen (Dept. of Economics, Stockholm School of Economics) |
| Abstract: | Sets closed under rational behavior were introduced by Basu and Weibull (1991) as subsets of the strategy space that contain all best replies to all strategy profiles in the set. We here consider a more restrictive notion of closure under rational behavior: a subset of the strategy space is strongly closed under rational behavior, or sCURB, if it contains all best replies to all probabilistic beliefs over the set. We present an algorithm that computes all minimal sCURB sets in any given finite game. Runtime measurements on two-player games (where the concepts of CURB and sCURB coincide) show that the algorithm is considerably faster than the earlier developed algorithm, that of Benisch et al. (2006). |
| Keywords: | curb sets; rational behavior; rationalizability; minimality |
| JEL: | C02 C62 C63 C72 |
| Date: | 2009–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:hastef:0722&r=cmp |