This paper explores the idea of using artificial adaptive agents in economic theory. In particular, we use Genetic Algorithms (GAs) to model the learning behavior of a population of adaptive and boundedly rational agents interacting in an economic system. We analyze the behavior of a GA in two...

In this paper we simulate the behavior of a population of boundedly rational agents in a two good economy where all agents can spend their time budget for the production of one or both goods or trading. Agents update their strategies according to a simple imitation type learning rule with noise....

This document provides a description of the modeling assumptions and economic features of the Eurace@Unibi model. Furthermore, the document shows typical patterns of the output generated by this model and compares it to empirically observable stylized facts. The Eurace@Unibi model provides a...

This paper considers investment behavior of duopolistic firms subject to technological progress. It is assumed that initially both firms offer a homogeneous product, but after a stochastic waiting time they are able to implement a product innovation. Production capacities of both firms are...

As Posner (1997) has observed, when individuals in a relationship can commit to imposing costs upon each other then efficient behavior in the absence of law is possible. The question is whether efficient norms of behavior evolve endogenously in a population. We show that in a standard hold up...

We consider a quantity-setting duopoly model with both firms having the possibility to produce a homogeneous product. Firm 1 has the option to carry out a product innovation project in two stages and in between the two stages Firm 2 can invest in cost-reducing process innovation. Hence, Firm 1's...

In this paper a quantity-setting duopoly is considered where one firm develops a new product which is horizontally differentiated from the existing product. The main question examined is which strategically important effects occur if the decision to develop the innovation and the decision to...

We consider a simple dynamic model of environmental taxation that exhibits time inconsistency. There are two categories of firms, Believers, who take the tax announcements made by the Regulator to face value, and Non-Believers, who perfectly anticipate the Regulator's decisions, albeit at a...

As Posner (1997) has observed, when individuals in a relationship can commit to imposing costs upon each other then efficient behavior in the absence of law is possible. The question is whether efficient norms of behavior evolve endogenously in a population. We show that in a standard hold up...