Luis R Izquierdo - Profile on Academia.edu (original) (raw)
Papers by Luis R Izquierdo
La economía artificial es uno de los métodos o enfoques de investigación para el estudio de siste... more La economía artificial es uno de los métodos o enfoques de investigación para el estudio de sistemas socioeconómicos complejos con mayor crecimiento durante los últimos años. Este artículo presenta una visión crítica sobre sus características, su potencial y los riesgos relativos al uso de esta metodología. Para ello, encontramos útil relacionar y comparar a la economía artificial con la economía teórica más tradicional. Desde nuestro análisis, la economía teórica y la economía artificial comparten los mismos objetivos, presentan menos diferencias metodológicas de las que a primera vista pudiera parecer, y sus aproximaciones son sin duda complementarias.
We implement a diffusion model for an innovative product in a market with a structure of social r... more We implement a diffusion model for an innovative product in a market with a structure of social relationships. Diffusion is described with a percolation approach in the price space. Percolation shows a phase transition from a diffusion to a no-diffusion regime. This has strong implications for market demand and pricing. We study the effect of network structure on market diffusion efficiency by considering a number of cases, such as one-dimensional and two-dimensional lattices, small worlds, Poisson networks and Scale-free networks. We consider two measures of diffusion efficiency: the size of diffusion and the diffusion time-length. We find that network connectivity "spreading" is the most important factor for the size of diffusion. Clustering is ineffective. This means that societies with higher dimensionality are better markets for diffusion. This result is most evident for the size of diffusion, while a short average path-length is more important for the speed of diffusion. Endogenous learning curves shift the percolation threshold to higher prices, and constitute an endogenous mechanism of price discrimination. The best market strategy of innovation diffusion is to start with high price and allow for a learning curve. 1 ) have identified a number of factors that drive and sometimes delay the establishment of new technologies, as consumer heterogeneity, imperfect information, sunk costs of adoption. Yet, the role of market network structure in the diffusion of innovations is a rather recent research topic , and can play a fundamental role in the success or failure of innovations. This is particularly relevant to the problem of more efficient innovations that do not diffuse in face of less desirable incumbent technologies.
Advances in Complex Systems, Apr 1, 2008
Agent-based modeling is being increasingly used to simulate socio-techno-ecosystems that involve ... more Agent-based modeling is being increasingly used to simulate socio-techno-ecosystems that involve social dynamics. Humans face constraints that they sometimes wish to challenge, and when they do so, they often trigger changes at the scale of the social group too. Including such adaptation dynamics explicitly in our models would allow simulation of the endogenous emergence of rule changes. This paper discusses such an approach in an institutional framework and develops a sequence that allows modeling of endogenous rule changes. Parts of this sequence are implemented in a NetLogo KISS model to provide some illustrative results.
Journal of Artificial Societies and Social Simulation, The
This paper describes work undertaken converting the Artificial Stock Market to using interval ari... more This paper describes work undertaken converting the Artificial Stock Market to using interval arithmetic instead of floating point arithmetic, the latter having been shown in an earlier article to be the cause of changed behaviour in the ASM (Polhill et al., in press). Results of both a naive (potentially automatable) conversion and one involving a more in-depth analysis of the code are presented that suggest that interval arithmetic may not be the best approach to dealing with the issue of numeric representation in the ASM. We also find that there are good reasons to suspect that floating point errors are not a significant issue for the ASM.
The paper concerns the socio-spatial dynamics of imitation within a computational model of land u... more The paper concerns the socio-spatial dynamics of imitation within a computational model of land use selection and change. Specifically , it reports investigations of the success of imitation in relation to alternative ways of choosing a course of action, in the context of different degrees and kinds of spatio-temporal heterogeneity. Simulation experiments with the model are the main method employed, but analytical work is also reported.
Journal of Artificial Societies and Social Simulation, The
In this paper social dilemmas are modelled as n-player games. Orthodox game theorists have been a... more In this paper social dilemmas are modelled as n-player games. Orthodox game theorists have been able to provide several concepts that narrow the set of expected outcomes in these models. However, in their search for a reduced set of solutions, they had to pay a very high price: they had to make disturbing assumptions such as instrumental rationality or common knowledge of rationality, which are rarely observed in any real-world situation. We propose a complementary approach, assuming that people adapt their behaviour according to their experience and look for outcomes that have proved to be satisfactory in the past. These ideas are investigated by conducting several experiments with an agent-based simulation model in which agents use a simple form of case-based reasoning. It is shown that cooperation can emerge from the interaction of selfish case-based reasoners. In determining how often cooperation occurs, aspiration thresholds, the agents' representation of the world, and the...
Journal of Artificial Societies and Social Simulation, The
This paper will explore the effects of errors in floating point arithmetic in two published agent... more This paper will explore the effects of errors in floating point arithmetic in two published agent-based models: the first a model of land use change (Polhill et al. 2001; Gotts et al. 2003), the second a model of the stock market (LeBaron et al. 1999). The first example demonstrates how branching statements with floating point operands of comparison operators create a high degree of nonlinearity, leading in this case to the creation of 'ghost' agents -- visible to some parts of the program but not to others. A potential solution to this problem is proposed. The second example shows how mathematical descriptions of models in the literature are insufficient to enable exact replication of work since mathematically equivalent implementations in terms of real number arithmetic are not equivalent in terms of floating point arithmetic.
Research from the Beagle Channel (Tierra del Fuego) offers a rich ethnographic and historical rec... more Research from the Beagle Channel (Tierra del Fuego) offers a rich ethnographic and historical record produced by the late inclusion of Tierra del Fuego in the industrial world (the Beagle Channel was discovered by R. Fitz-Roy in 1830). This is an interesting frame for using new techniques (social simulation by Agent Based Modelling (ABM)) to generate new hypotheses in archaeology. In this case, the hypothesis is focused on the role of social cooperation in Yámana hunter-fisher-gatherer society.
The market effects of quality variability and uncertainty have classically been studied in the pa... more The market effects of quality variability and uncertainty have classically been studied in the particular context of asymmetric information, focusing on the sellers' expected behaviour and the phenomenon of adverse selection. Looking instead at the consumers' expected behaviour, we use an agent-based model to illustrate how quality uncertainty by itself can lead to market failure, even in the absence of asymmetric information. Assuming that buyers estimate the quality of the product they buy using their past experience from previous purchases, and considering quality estimation rules which are individually "sensible" and unbiased, market interaction is shown to produce general underestimation of product quality, as well as systematic drops in prices and losses in market efficiency. It is also shown that the spread of information through social networks can greatly mitigate this market failure.
We propose a model of technological transitions based on two different types of innovations. Bran... more We propose a model of technological transitions based on two different types of innovations. Branching innovations refer to technological improvements along a particular path, while recombinant innovations represent fusions of multiple paths. Recombinant innovations create "short-cuts" which reduce switching costs allowing agents to escape a technological lock-in. As a result, recombinant innovations speed up technological progress allowing transitions that are impossible with only branching innovations. Our model replicates some stylized facts of technological change, such as technological lockin, experimental failure, punctuated change and irreversibility. Furthermore, an extensive simulation experiment suggests that there is an optimal rate of innovation, which is strongly correlated with the number of recombination innovations. This underlines the pivotal role of technological variety as a seed for recombinant innovation leading to technological transitions.
Lecture Notes in Economics and Mathematical Systems, 2006
This paper characterises the transient dynamics and the long-term behaviour of a game theoretical... more This paper characterises the transient dynamics and the long-term behaviour of a game theoretical model where players' decisions at any particular time are guided by a single similar situation they experienced in the past -a simple form of casebased reasoning. The transient dynamics of the model are very dependent on the process by which players learn how to play the game in any given situation. The long-run behaviour of the model varies significantly depending on whether players can occasionally explore different actions or not. When the probability of experimentation is small but non-zero, only a subset of the outcomes that are possible in the absence of experimentation persists in the long-run. In this paper we present some features that characterise such a subset of stochastically stable outcomes.
Understanding Complex Systems, 2013
This chapter shows how computer simulation and mathematical analysis can be used together to unde... more This chapter shows how computer simulation and mathematical analysis can be used together to understand the dynamics of computer models. For this purpose, we show that it is useful to see the computer model as a particular implementation of a formal model in a certain programming language. This formal model is the abstract entity which is defined by the input-output relation that the computer model executes, and can be seen as a function that transforms probability distributions over the set of possible inputs into probability distributions over the set of possible outputs.
Games, 2011
The replicator-mutator dynamics is a set of differential equations frequently used in biological ... more The replicator-mutator dynamics is a set of differential equations frequently used in biological and socioeconomic contexts to model evolutionary processes subject to mutation, error or experimentation. The replicator-mutator dynamics generalizes the widely used replicator dynamics, which appears in this framework as the extreme case where replication is perfectly precise. This paper studies the influence of strictly dominated strategies on the location of the rest points of the replicator-mutator dynamics, at the limit where the mutation terms become arbitrarily small. It can be proved that such limit rest points for small mutation are Nash equilibria, so strictly dominated strategies do not occur at limit stationary points. However, we show through a simple case how strictly dominated strategies can have an influence on the location of the limit rest points for small mutation. Consequently, the characterization of the limit rest points of the replicator-mutator dynamics cannot in general proceed safely by readily eliminating strictly dominated strategies.
Neurocirugía, 2007
Neurocirugía publishes a printed edition for subscribers, and also an electronic edition which is... more Neurocirugía publishes a printed edition for subscribers, and also an electronic edition which is available online free of charge. The coexistence of these two formats raises some issues regarding their justification and their future evolution, e.g. why does a subscription-based journal offer free online access? Would it be wise to charge for -or somewhat limit-the electronic access to the Journal? How is the Internet changing the benefits to society that the Journal provides? Will the printed and the electronic edition of the Journal continue to coexist? This paper provides some answers and reflections on these questions. Many of our considerations are based on ideas that have been presented and discussed in a series of editorials in Neurocirugía (see Neurocirugía 17 (2), 2006); in this paper we reconsider, complement, and rearrange previous arguments to address the issues mentioned above. Based on an analysis of economic costs and of all the stakeholders involved (authors, readers, the Journal, the Spanish Society of Neurosurgery, and society as a whole), we justify the present coexistence of the two publishing formats, defend free online access, and provide our view on the expected evolution of the Journal. While we focus primarily on Neurocirugía, most of our reflections can be carried over to other scientific journals.
Understanding Complex Systems, 2013
Given the complex and exploratory nature of many agent-based models, checking that the model perf... more Given the complex and exploratory nature of many agent-based models, checking that the model performs in the manner intended by its designers is a very challenging task. This chapter helps the reader to identify some of the possible types of error and artefact that may appear in the different stages of the modelling process. It will also suggest some activities that can be conducted to detect, and hence avoid, each type.
Journal of Statistical Physics, 2013
This paper illustrates how a deterministic approximation of a stochastic process can be usefully ... more This paper illustrates how a deterministic approximation of a stochastic process can be usefully applied to analyse the dynamics of many simple simulation models. To demonstrate the type of results that can be obtained using this approximation, we present two illustrative examples which are meant to serve as methodological references for researchers exploring this area. Finally, we prove some convergence results for simulations of a family of evolutionary games, namely, intra-population imitation models in n-player games with arbitrary payoffs.
Journal of Business Research, 2007
The market effects of quality variability and uncertainty have classically been studied in the pa... more The market effects of quality variability and uncertainty have classically been studied in the particular context of asymmetric information, focusing on the sellers' expected behavior and the phenomenon of adverse selection. Looking instead at the consumers' expected behavior, this paper uses an agent-based model to illustrate how quality uncertainty by itself can lead to market failure, even in the absence of asymmetric information. Assuming that buyers estimate the quality of the product they buy on the basis of their experience from previous purchases, and considering quality estimation rules which are individually sensible and unbiased, this paper shows that market interaction with quality uncertainty generally produces underestimation of product quality as well as systematic drops in prices and losses of market efficiency. This study also shows that the spread of information through social networks can greatly mitigate this market failure.
Games and Economic Behavior, 2007
Reinforcement learners tend to repeat actions that led to satisfactory outcomes in the past, and ... more Reinforcement learners tend to repeat actions that led to satisfactory outcomes in the past, and avoid choices that resulted in unsatisfactory experiences. This behavior is one of the most widespread adaptation mechanisms in nature. In this paper we fully characterize the dynamics of one of the best known stochastic models of reinforcement learning [Bush, R., Mosteller, F., 1955. Stochastic Models of Learning. Wiley & Sons, New York] for 2-player 2-strategy games. We also provide some extensions for more general games and for a wider class of learning algorithms. Specifically, it is shown that the transient dynamics of Bush and Mosteller's model can be substantially different from its asymptotic behavior. It is also demonstrated that in general-and in sharp contrast to other reinforcement learning models in the literature-the asymptotic dynamics of Bush and Mosteller's model cannot be approximated using the continuous time limit version of its expected motion.
Environmental Modelling & Software, 2006
Floating point arithmetic is a subject all too often ignored, yet, for agent-based models in part... more Floating point arithmetic is a subject all too often ignored, yet, for agent-based models in particular, it has the potential to create misleading results, and even to influence emergent outcomes of the model. Using a simple demonstration model, this paper illustrates the problems that accumulated floating point errors can cause, and compares a number of techniques that might be used to address them. We show that inexact representation of parameter values, imprecision in calculation results, and differing implementations of mathematical expressions can significantly influence the behaviour of the model, and create issues for replicating results, though they do not necessarily do so. None of the techniques offer a failsafe approach that can be applied in any situation, though interval arithmetic is the most promising.
La economía artificial es uno de los métodos o enfoques de investigación para el estudio de siste... more La economía artificial es uno de los métodos o enfoques de investigación para el estudio de sistemas socioeconómicos complejos con mayor crecimiento durante los últimos años. Este artículo presenta una visión crítica sobre sus características, su potencial y los riesgos relativos al uso de esta metodología. Para ello, encontramos útil relacionar y comparar a la economía artificial con la economía teórica más tradicional. Desde nuestro análisis, la economía teórica y la economía artificial comparten los mismos objetivos, presentan menos diferencias metodológicas de las que a primera vista pudiera parecer, y sus aproximaciones son sin duda complementarias.
We implement a diffusion model for an innovative product in a market with a structure of social r... more We implement a diffusion model for an innovative product in a market with a structure of social relationships. Diffusion is described with a percolation approach in the price space. Percolation shows a phase transition from a diffusion to a no-diffusion regime. This has strong implications for market demand and pricing. We study the effect of network structure on market diffusion efficiency by considering a number of cases, such as one-dimensional and two-dimensional lattices, small worlds, Poisson networks and Scale-free networks. We consider two measures of diffusion efficiency: the size of diffusion and the diffusion time-length. We find that network connectivity "spreading" is the most important factor for the size of diffusion. Clustering is ineffective. This means that societies with higher dimensionality are better markets for diffusion. This result is most evident for the size of diffusion, while a short average path-length is more important for the speed of diffusion. Endogenous learning curves shift the percolation threshold to higher prices, and constitute an endogenous mechanism of price discrimination. The best market strategy of innovation diffusion is to start with high price and allow for a learning curve. 1 ) have identified a number of factors that drive and sometimes delay the establishment of new technologies, as consumer heterogeneity, imperfect information, sunk costs of adoption. Yet, the role of market network structure in the diffusion of innovations is a rather recent research topic , and can play a fundamental role in the success or failure of innovations. This is particularly relevant to the problem of more efficient innovations that do not diffuse in face of less desirable incumbent technologies.
Advances in Complex Systems, Apr 1, 2008
Agent-based modeling is being increasingly used to simulate socio-techno-ecosystems that involve ... more Agent-based modeling is being increasingly used to simulate socio-techno-ecosystems that involve social dynamics. Humans face constraints that they sometimes wish to challenge, and when they do so, they often trigger changes at the scale of the social group too. Including such adaptation dynamics explicitly in our models would allow simulation of the endogenous emergence of rule changes. This paper discusses such an approach in an institutional framework and develops a sequence that allows modeling of endogenous rule changes. Parts of this sequence are implemented in a NetLogo KISS model to provide some illustrative results.
Journal of Artificial Societies and Social Simulation, The
This paper describes work undertaken converting the Artificial Stock Market to using interval ari... more This paper describes work undertaken converting the Artificial Stock Market to using interval arithmetic instead of floating point arithmetic, the latter having been shown in an earlier article to be the cause of changed behaviour in the ASM (Polhill et al., in press). Results of both a naive (potentially automatable) conversion and one involving a more in-depth analysis of the code are presented that suggest that interval arithmetic may not be the best approach to dealing with the issue of numeric representation in the ASM. We also find that there are good reasons to suspect that floating point errors are not a significant issue for the ASM.
The paper concerns the socio-spatial dynamics of imitation within a computational model of land u... more The paper concerns the socio-spatial dynamics of imitation within a computational model of land use selection and change. Specifically , it reports investigations of the success of imitation in relation to alternative ways of choosing a course of action, in the context of different degrees and kinds of spatio-temporal heterogeneity. Simulation experiments with the model are the main method employed, but analytical work is also reported.
Journal of Artificial Societies and Social Simulation, The
In this paper social dilemmas are modelled as n-player games. Orthodox game theorists have been a... more In this paper social dilemmas are modelled as n-player games. Orthodox game theorists have been able to provide several concepts that narrow the set of expected outcomes in these models. However, in their search for a reduced set of solutions, they had to pay a very high price: they had to make disturbing assumptions such as instrumental rationality or common knowledge of rationality, which are rarely observed in any real-world situation. We propose a complementary approach, assuming that people adapt their behaviour according to their experience and look for outcomes that have proved to be satisfactory in the past. These ideas are investigated by conducting several experiments with an agent-based simulation model in which agents use a simple form of case-based reasoning. It is shown that cooperation can emerge from the interaction of selfish case-based reasoners. In determining how often cooperation occurs, aspiration thresholds, the agents' representation of the world, and the...
Journal of Artificial Societies and Social Simulation, The
This paper will explore the effects of errors in floating point arithmetic in two published agent... more This paper will explore the effects of errors in floating point arithmetic in two published agent-based models: the first a model of land use change (Polhill et al. 2001; Gotts et al. 2003), the second a model of the stock market (LeBaron et al. 1999). The first example demonstrates how branching statements with floating point operands of comparison operators create a high degree of nonlinearity, leading in this case to the creation of 'ghost' agents -- visible to some parts of the program but not to others. A potential solution to this problem is proposed. The second example shows how mathematical descriptions of models in the literature are insufficient to enable exact replication of work since mathematically equivalent implementations in terms of real number arithmetic are not equivalent in terms of floating point arithmetic.
Research from the Beagle Channel (Tierra del Fuego) offers a rich ethnographic and historical rec... more Research from the Beagle Channel (Tierra del Fuego) offers a rich ethnographic and historical record produced by the late inclusion of Tierra del Fuego in the industrial world (the Beagle Channel was discovered by R. Fitz-Roy in 1830). This is an interesting frame for using new techniques (social simulation by Agent Based Modelling (ABM)) to generate new hypotheses in archaeology. In this case, the hypothesis is focused on the role of social cooperation in Yámana hunter-fisher-gatherer society.
The market effects of quality variability and uncertainty have classically been studied in the pa... more The market effects of quality variability and uncertainty have classically been studied in the particular context of asymmetric information, focusing on the sellers' expected behaviour and the phenomenon of adverse selection. Looking instead at the consumers' expected behaviour, we use an agent-based model to illustrate how quality uncertainty by itself can lead to market failure, even in the absence of asymmetric information. Assuming that buyers estimate the quality of the product they buy using their past experience from previous purchases, and considering quality estimation rules which are individually "sensible" and unbiased, market interaction is shown to produce general underestimation of product quality, as well as systematic drops in prices and losses in market efficiency. It is also shown that the spread of information through social networks can greatly mitigate this market failure.
We propose a model of technological transitions based on two different types of innovations. Bran... more We propose a model of technological transitions based on two different types of innovations. Branching innovations refer to technological improvements along a particular path, while recombinant innovations represent fusions of multiple paths. Recombinant innovations create "short-cuts" which reduce switching costs allowing agents to escape a technological lock-in. As a result, recombinant innovations speed up technological progress allowing transitions that are impossible with only branching innovations. Our model replicates some stylized facts of technological change, such as technological lockin, experimental failure, punctuated change and irreversibility. Furthermore, an extensive simulation experiment suggests that there is an optimal rate of innovation, which is strongly correlated with the number of recombination innovations. This underlines the pivotal role of technological variety as a seed for recombinant innovation leading to technological transitions.
Lecture Notes in Economics and Mathematical Systems, 2006
This paper characterises the transient dynamics and the long-term behaviour of a game theoretical... more This paper characterises the transient dynamics and the long-term behaviour of a game theoretical model where players' decisions at any particular time are guided by a single similar situation they experienced in the past -a simple form of casebased reasoning. The transient dynamics of the model are very dependent on the process by which players learn how to play the game in any given situation. The long-run behaviour of the model varies significantly depending on whether players can occasionally explore different actions or not. When the probability of experimentation is small but non-zero, only a subset of the outcomes that are possible in the absence of experimentation persists in the long-run. In this paper we present some features that characterise such a subset of stochastically stable outcomes.
Understanding Complex Systems, 2013
This chapter shows how computer simulation and mathematical analysis can be used together to unde... more This chapter shows how computer simulation and mathematical analysis can be used together to understand the dynamics of computer models. For this purpose, we show that it is useful to see the computer model as a particular implementation of a formal model in a certain programming language. This formal model is the abstract entity which is defined by the input-output relation that the computer model executes, and can be seen as a function that transforms probability distributions over the set of possible inputs into probability distributions over the set of possible outputs.
Games, 2011
The replicator-mutator dynamics is a set of differential equations frequently used in biological ... more The replicator-mutator dynamics is a set of differential equations frequently used in biological and socioeconomic contexts to model evolutionary processes subject to mutation, error or experimentation. The replicator-mutator dynamics generalizes the widely used replicator dynamics, which appears in this framework as the extreme case where replication is perfectly precise. This paper studies the influence of strictly dominated strategies on the location of the rest points of the replicator-mutator dynamics, at the limit where the mutation terms become arbitrarily small. It can be proved that such limit rest points for small mutation are Nash equilibria, so strictly dominated strategies do not occur at limit stationary points. However, we show through a simple case how strictly dominated strategies can have an influence on the location of the limit rest points for small mutation. Consequently, the characterization of the limit rest points of the replicator-mutator dynamics cannot in general proceed safely by readily eliminating strictly dominated strategies.
Neurocirugía, 2007
Neurocirugía publishes a printed edition for subscribers, and also an electronic edition which is... more Neurocirugía publishes a printed edition for subscribers, and also an electronic edition which is available online free of charge. The coexistence of these two formats raises some issues regarding their justification and their future evolution, e.g. why does a subscription-based journal offer free online access? Would it be wise to charge for -or somewhat limit-the electronic access to the Journal? How is the Internet changing the benefits to society that the Journal provides? Will the printed and the electronic edition of the Journal continue to coexist? This paper provides some answers and reflections on these questions. Many of our considerations are based on ideas that have been presented and discussed in a series of editorials in Neurocirugía (see Neurocirugía 17 (2), 2006); in this paper we reconsider, complement, and rearrange previous arguments to address the issues mentioned above. Based on an analysis of economic costs and of all the stakeholders involved (authors, readers, the Journal, the Spanish Society of Neurosurgery, and society as a whole), we justify the present coexistence of the two publishing formats, defend free online access, and provide our view on the expected evolution of the Journal. While we focus primarily on Neurocirugía, most of our reflections can be carried over to other scientific journals.
Understanding Complex Systems, 2013
Given the complex and exploratory nature of many agent-based models, checking that the model perf... more Given the complex and exploratory nature of many agent-based models, checking that the model performs in the manner intended by its designers is a very challenging task. This chapter helps the reader to identify some of the possible types of error and artefact that may appear in the different stages of the modelling process. It will also suggest some activities that can be conducted to detect, and hence avoid, each type.
Journal of Statistical Physics, 2013
This paper illustrates how a deterministic approximation of a stochastic process can be usefully ... more This paper illustrates how a deterministic approximation of a stochastic process can be usefully applied to analyse the dynamics of many simple simulation models. To demonstrate the type of results that can be obtained using this approximation, we present two illustrative examples which are meant to serve as methodological references for researchers exploring this area. Finally, we prove some convergence results for simulations of a family of evolutionary games, namely, intra-population imitation models in n-player games with arbitrary payoffs.
Journal of Business Research, 2007
The market effects of quality variability and uncertainty have classically been studied in the pa... more The market effects of quality variability and uncertainty have classically been studied in the particular context of asymmetric information, focusing on the sellers' expected behavior and the phenomenon of adverse selection. Looking instead at the consumers' expected behavior, this paper uses an agent-based model to illustrate how quality uncertainty by itself can lead to market failure, even in the absence of asymmetric information. Assuming that buyers estimate the quality of the product they buy on the basis of their experience from previous purchases, and considering quality estimation rules which are individually sensible and unbiased, this paper shows that market interaction with quality uncertainty generally produces underestimation of product quality as well as systematic drops in prices and losses of market efficiency. This study also shows that the spread of information through social networks can greatly mitigate this market failure.
Games and Economic Behavior, 2007
Reinforcement learners tend to repeat actions that led to satisfactory outcomes in the past, and ... more Reinforcement learners tend to repeat actions that led to satisfactory outcomes in the past, and avoid choices that resulted in unsatisfactory experiences. This behavior is one of the most widespread adaptation mechanisms in nature. In this paper we fully characterize the dynamics of one of the best known stochastic models of reinforcement learning [Bush, R., Mosteller, F., 1955. Stochastic Models of Learning. Wiley & Sons, New York] for 2-player 2-strategy games. We also provide some extensions for more general games and for a wider class of learning algorithms. Specifically, it is shown that the transient dynamics of Bush and Mosteller's model can be substantially different from its asymptotic behavior. It is also demonstrated that in general-and in sharp contrast to other reinforcement learning models in the literature-the asymptotic dynamics of Bush and Mosteller's model cannot be approximated using the continuous time limit version of its expected motion.
Environmental Modelling & Software, 2006
Floating point arithmetic is a subject all too often ignored, yet, for agent-based models in part... more Floating point arithmetic is a subject all too often ignored, yet, for agent-based models in particular, it has the potential to create misleading results, and even to influence emergent outcomes of the model. Using a simple demonstration model, this paper illustrates the problems that accumulated floating point errors can cause, and compares a number of techniques that might be used to address them. We show that inexact representation of parameter values, imprecision in calculation results, and differing implementations of mathematical expressions can significantly influence the behaviour of the model, and create issues for replicating results, though they do not necessarily do so. None of the techniques offer a failsafe approach that can be applied in any situation, though interval arithmetic is the most promising.