Computational Economics - Special issue: Evolutionary processes in economics
Choice of Transaction Channels: The Effects of Product Characteristics on Market Evolution
Journal of Management Information Systems
Learning to Collude Tacitly on Production Levels by Oligopolistic Agents
Computational Economics
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This paper compares two methodologies that have been used tounderstand the evolution of bargaining conventions. The first is theanalytical approach that employs a standard learning dynamic andcomputes equilibria numerically. The second approach simulatesan environment with a finite population of interacting agents.We compare these two approaches within the context of threevariations on a common model. In one variation agents randomlyexperiment with different demands. A second variation positsassortative interactions, and the third allows forsophistication in agent strategies. The simulation resultssuggest that the agent-based approach performs well in selectingequilibria in most instances, but exact predicted populationdistributions often vary from those calculated numerically.Classification Numbers: C63, C73, C78.