Despite many years of active research in the field and a number of fruitful applications, agent-based modeling has not yet made it through to the top ranking economic journals. In this paper we investigate why. We look at the following problematic areas: (i) interpretation of the simulation...

This paper presents an idealized model of social interaction, where preferences are private information and individuals cannot condition their behavior on the identity of whom they are interacting with. An optimal decentralized benchmark is identified, where each individual imposes some...