Agent (economics): Difference between revisions
Content deleted Content added
TealMartlet (talk | contribs) m undid previous edit Tags: Manual revert Reverted Visual edit |
Citation bot (talk | contribs) Removed URL that duplicated identifier. | Use this bot. Report bugs. | Suggested by Superegz | Category:Asymmetric information | #UCB_Category 21/24 |
||
| (9 intermediate revisions by 7 users not shown) | |||
| Line 1: | Line 1: | ||
{{short description|Actor and decision maker in an economic model}} |
{{short description|Actor and decision maker in an economic model}} |
||
In [[economics]], an '''agent''' is an actor ( |
In [[economics]], an '''agent''' is an actor (more specifically, a [[decision maker]]) in a [[Economic model|model]] of some aspect of the [[economy]]. Typically, every agent makes decisions by solving a well- or ill-defined [[Optimization (mathematics)|optimization]] or choice problem. |
||
For example |
For example, ''buyers'' ([[Consumption (economics)|consumer]]s) and ''sellers'' ([[Production (economics)|producer]]s) are two common types of agents in [[partial equilibrium]] models of a single [[Market (economics)|market]]. [[Macroeconomic model]]s, especially [[dynamic stochastic general equilibrium]] models that are explicitly based on [[microfoundations]], often distinguish [[household]]s, [[business entity|firm]]s, and [[government]]s or [[central bank]]s as the main types of agents in the economy. Each of these agents may play multiple roles in the economy; households, for example, might act as consumers, as [[Workforce|workers]], and as voters in the model. Some macroeconomic models distinguish even more types of agents, such as workers and shoppers<ref>{{cite journal |first=Robert Jr. |last=Lucas |year=1980 |title=Equilibrium in a pure currency economy |journal=[[Economic Inquiry]] |volume=18 |issue=2 |pages=203–220 |doi=10.1111/j.1465-7295.1980.tb00570.x }}</ref> or [[commercial bank]]s.<ref>{{cite journal |first=Timothy S. |last=Fuerst |year=1992 |title=Liquidity, loanable funds, and real activity |journal=[[Journal of Monetary Economics]] |volume=29 |issue=1 |pages=3–24 |doi=10.1016/0304-3932(92)90021-S }}</ref> |
||
The term ''agent'' is also used in relation to [[Principal–agent problem|principal–agent]] models; in this case, it refers specifically to someone delegated to act on behalf of a [[Principal (commercial law)|principal]].<ref>{{cite book |author-link=Joseph E. Stiglitz |first=Joseph E. |last=Stiglitz |year=1987 |chapter=Principal and Agent |title=The New Palgrave: A Dictionary of Economics |volume=3 |pages=966–971 |title-link=New Palgrave: A Dictionary of Economics }}</ref> |
|||
In [[agent-based computational economics]], |
In [[agent-based computational economics]], corresponding agents are "computational objects modeled as interacting according to rules" over space and time, not real people. The rules are formulated to model behavior and social interactions based on stipulated incentives and information.<ref>{{cite book |first=Scott E. |last=Page |year=2008 |chapter=Agent-based models |title=The New Palgrave Dictionary of Economics |edition=2nd |chapter-url=http://www.dictionaryofeconomics.com/article?id=pde2008_A000218&edition=current&q=agent-based%20computational%20modeling&topicid=&result_number=1 |title-link=The New Palgrave Dictionary of Economics }}</ref> The concept of an ''agent'' may be broadly interpreted to be any persistent individual, social, biological, or physical entity interacting with other such entities in the context of a dynamic multi-agent economic system. |
||
==Representative vs. heterogenous agents== |
==Representative vs. heterogenous agents== |
||
An [[Model (economics)|economic model]] in which all agents of a given type (such as all consumers, or all firms) are assumed to be exactly identical is called a [[representative agent]] model. A model which recognizes differences among agents is called a [[Heterogeneous agents|heterogeneous agent]] model. |
An [[Model (economics)|economic model]] in which all agents of a given type (such as all consumers, or all firms) are assumed to be exactly identical is called a [[representative agent]] model. A model which recognizes differences among agents is called a [[Heterogeneous agents|heterogeneous agent]] model. Economists often use representative agent models when they want to describe the economy in the simplest terms possible. In contrast, they may be obliged to use heterogeneous agent models when differences among agents are directly relevant for the question at hand.<ref>{{cite book |first=José-Víctor |last=Ríos-Rull |year=1995 |chapter=Models with Heterogeneous Agents |editor-first=T. |editor-last=Cooley |title=Frontiers of Business Cycle Theory |publisher=Princeton University Press |isbn=978-0-691-04323-4 }}</ref> For example, considering heterogeneity in age is likely to be necessary in a model used to study the economic effects of pensions;<ref>{{cite journal |first1=David |last1=Altig |first2=Alan |last2=Auerbach |first3=Laurence |last3=Kotlikoff |first4=Kent |last4=Smetters |first5=Jan |last5=Walliser |year=2001 |title=Simulating Fundamental Tax Reform in the United States |journal=[[American Economic Review]] |volume=91 |issue=3 |pages=574–595 |jstor=2677880 |doi=10.1257/aer.91.3.574}}</ref> considering heterogeneity in wealth is likely to be necessary in a model used to study [[Prudence#Prudence in economics and finance|precautionary saving]]<ref>{{cite journal |first=Christopher |last=Carroll |year=1997 |title=Buffer-Stock Saving and the Life Cycle/Permanent Income Hypothesis |journal=[[Quarterly Journal of Economics]] |volume=112 |issue=1 |pages=1–55 |doi=10.1162/003355397555109 |s2cid=14047708 |url=http://www.nber.org/papers/w5788.pdf }}</ref> or redistributive taxation.<ref>{{cite journal |first=Roland |last=Bénabou |year=2002 |title=Tax and Education Policy in a Heterogeneous-Agent Economy: What Levels of Redistribution Maximize Growth and Efficiency? |journal=[[Econometrica]] |volume=70 |issue=2 |pages=481–517 |doi=10.1111/1468-0262.00293 |url=http://archive.nyu.edu/bitstream/2451/27361/2/S-MF-99-03.pdf }}</ref> |
||
==See also== |
==See also== |
||
| Line 23: | Line 23: | ||
==Further reading== |
==Further reading== |
||
*{{cite journal |last=Hartley |first=James E. |title=Retrospectives: The Origins of the Representative Agent |journal=[[Journal of Economic Perspectives]] |year=1997 |volume=10 |issue=2 |pages=169–177 |jstor=2138488 |doi=10.1257/jep.10.2.169| |
*{{cite journal |last=Hartley |first=James E. |title=Retrospectives: The Origins of the Representative Agent |journal=[[Journal of Economic Perspectives]] |year=1997 |volume=10 |issue=2 |pages=169–177 |jstor=2138488 |doi=10.1257/jep.10.2.169|s2cid=154459239 |doi-access=free }} |
||
*{{cite journal |last=Kirman |first=Alan P. |title=Whom or What Does the Representative Individual Represent? |journal=[[Journal of Economic Perspectives]] |year=1992 |volume=6 |issue=2 |pages=117–136 |jstor=2138411 |doi=10.1257/jep.6.2.117|doi-access= |
*{{cite journal |last=Kirman |first=Alan P. |title=Whom or What Does the Representative Individual Represent? |journal=[[Journal of Economic Perspectives]] |year=1992 |volume=6 |issue=2 |pages=117–136 |jstor=2138411 |doi=10.1257/jep.6.2.117|doi-access= }} |
||
[[Category:Decision theory]] |
[[Category:Decision theory]] |
||
Latest revision as of 12:25, 6 September 2024
In economics, an agent is an actor (more specifically, a decision maker) in a model of some aspect of the economy. Typically, every agent makes decisions by solving a well- or ill-defined optimization or choice problem.
For example, buyers (consumers) and sellers (producers) are two common types of agents in partial equilibrium models of a single market. Macroeconomic models, especially dynamic stochastic general equilibrium models that are explicitly based on microfoundations, often distinguish households, firms, and governments or central banks as the main types of agents in the economy. Each of these agents may play multiple roles in the economy; households, for example, might act as consumers, as workers, and as voters in the model. Some macroeconomic models distinguish even more types of agents, such as workers and shoppers[1] or commercial banks.[2]
The term agent is also used in relation to principal–agent models; in this case, it refers specifically to someone delegated to act on behalf of a principal.[3]
In agent-based computational economics, corresponding agents are "computational objects modeled as interacting according to rules" over space and time, not real people. The rules are formulated to model behavior and social interactions based on stipulated incentives and information.[4] The concept of an agent may be broadly interpreted to be any persistent individual, social, biological, or physical entity interacting with other such entities in the context of a dynamic multi-agent economic system.
Representative vs. heterogenous agents
[edit]An economic model in which all agents of a given type (such as all consumers, or all firms) are assumed to be exactly identical is called a representative agent model. A model which recognizes differences among agents is called a heterogeneous agent model. Economists often use representative agent models when they want to describe the economy in the simplest terms possible. In contrast, they may be obliged to use heterogeneous agent models when differences among agents are directly relevant for the question at hand.[5] For example, considering heterogeneity in age is likely to be necessary in a model used to study the economic effects of pensions;[6] considering heterogeneity in wealth is likely to be necessary in a model used to study precautionary saving[7] or redistributive taxation.[8]
See also
[edit]References
[edit]- ^ Lucas, Robert Jr. (1980). "Equilibrium in a pure currency economy". Economic Inquiry. 18 (2): 203–220. doi:10.1111/j.1465-7295.1980.tb00570.x.
- ^ Fuerst, Timothy S. (1992). "Liquidity, loanable funds, and real activity". Journal of Monetary Economics. 29 (1): 3–24. doi:10.1016/0304-3932(92)90021-S.
- ^ Stiglitz, Joseph E. (1987). "Principal and Agent". The New Palgrave: A Dictionary of Economics. Vol. 3. pp. 966–971.
- ^ Page, Scott E. (2008). "Agent-based models". The New Palgrave Dictionary of Economics (2nd ed.).
- ^ Ríos-Rull, José-Víctor (1995). "Models with Heterogeneous Agents". In Cooley, T. (ed.). Frontiers of Business Cycle Theory. Princeton University Press. ISBN 978-0-691-04323-4.
- ^ Altig, David; Auerbach, Alan; Kotlikoff, Laurence; Smetters, Kent; Walliser, Jan (2001). "Simulating Fundamental Tax Reform in the United States". American Economic Review. 91 (3): 574–595. doi:10.1257/aer.91.3.574. JSTOR 2677880.
- ^ Carroll, Christopher (1997). "Buffer-Stock Saving and the Life Cycle/Permanent Income Hypothesis" (PDF). Quarterly Journal of Economics. 112 (1): 1–55. doi:10.1162/003355397555109. S2CID 14047708.
- ^ Bénabou, Roland (2002). "Tax and Education Policy in a Heterogeneous-Agent Economy: What Levels of Redistribution Maximize Growth and Efficiency?" (PDF). Econometrica. 70 (2): 481–517. doi:10.1111/1468-0262.00293.
Further reading
[edit]- Hartley, James E. (1997). "Retrospectives: The Origins of the Representative Agent". Journal of Economic Perspectives. 10 (2): 169–177. doi:10.1257/jep.10.2.169. JSTOR 2138488. S2CID 154459239.
- Kirman, Alan P. (1992). "Whom or What Does the Representative Individual Represent?". Journal of Economic Perspectives. 6 (2): 117–136. doi:10.1257/jep.6.2.117. JSTOR 2138411.