Article,
A model of learning and emulation with artificial adaptive agents
Journal of Economic Dynamics and Control, 22 (2): 179--207 (February 1998)
DOI: doi:10.1016/S0165-1889(97)00072-9
Abstract
We study adaptive learning in a sequence of
overlapping generations economies in which agents live
for n periods. Agents initially have heterogeneous
beliefs, and form multi-step-ahead forecasts using a
forecast rule chosen from a vast set of candidate
rules. Agents learn in every period by creating new
forecast rules and by emulating the forecast rules of
other agents. Computational experiments show that
systems so defined can yield three qualitatively
different types of long-run outcomes: (1) coordination
on a low inflation, stationary perfect foresight
equilibrium; (2) persistent currency collapse; and (3)
coordination failure within the allotted time frame.
