This paper discusses modern macroeconomic and financial models in the light of the current crisis. Theory has been revealed to be inadequate in its explanation of the origins and the nature of the crisis, as Jean-Claude Trichet the Governor of the European Central bank and his colleagues at...

In this paper we give a theoretical model of buyers' behaviour on a market for a perishable good where no prices are posted. We show that if buyers learn from their own previous experience there is a sharp division between those who learn to be loyal to certain sellers and those who continue to...

Standard macroeconomics, based on a reductionist approach centered on the representative agent, is badly equipped to explain the empirical evidence where heterogeneity and industrial dynamics are the rule. In this paper we show that a simple agent-based model of heterogeneous financially fragile...

This chapter takes as its starting point the idea that any model of the economy must have heterogeneous agents. Such agents together form a complex adaptive system where the aggregate behavior emerges from the interaction between the individuals. Such systems do not lend themselves to being...

This book analyses situations in which individual agents, who might be different from each other, interact and produce behaviour on the aggregate level which does not correspond to that of the average actor. This leads to aggregate outcomes which would be impossible to explain in a more standard...

This book is a collection of essays which examine how the properties of aggregate variables are influenced by the actions and interactions of heterogenous individuals in different economic contexts. The common denominator of the essays is a critique of the representative agent hypothesis. If...