Convergence of Income Growth Rates in Evolutionary Agent-Based Economics

Volker Nannen

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arXiv · 1009.2721

Convergence of Income Growth Rates in Evolutionary Agent-Based Economics

Volker Nannen

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Abstract

We consider a heterogeneous agent-based economic model where economic agents have strictly bounded rationality and where income allocation strategies evolve through selective imitation. Income is calculated by a Cobb-Douglas type production function, and selection of strategies for imitation depends on the income growth rate they generate. We show that under these conditions, when an agent adopts a new strategy, the effect on its income growth rate is immediately visible to other agents, which allows a group of imitating agents to quickly adapt their strategies when needed.

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Volker Nannen. 2010-09-10. Convergence of Income Growth Rates in Evolutionary Agent-Based Economics. https://arxiv.org/abs/1009.2721

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