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on Computational Economics |
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Issue of 2009‒08‒16
eight papers chosen by |
| By: | Spiliopoulos, Leonidas |
| Abstract: | This paper addresses how neural networks learn to play one-shot normal form games through experience in an environment of randomly generated game payoffs and randomly selected opponents. This agent based computational approach allows the modeling of learning all strategic types of normal form games, irregardless of the number of pure and mixed strategy Nash equilibria that they exhibit. This is a more realistic model of learning than the oft used models in the game theory learning literature which are usually restricted either to repeated games against the same opponent (or games with different payoffs but belonging to the same strategic class). The neural network agents were found to approximate human behavior in experimental one-shot games very well as the Spearman correlation coefficients between their behavior and that of human subjects ranged from 0.49 to 0.8857 across numerous experimental studies. Also, they exhibited the endogenous emergence of heuristics that have been found effective in describing human behavior in one-shot games. The notion of bounded rationality is explored by varying the topologies of the neural networks, which indirectly affects their ability to act as universal approximators of any function. The neural networks' behavior was assessed across various dimensions such as convergence to Nash equilibria, equilibrium selection and adherence to principles of iterated dominance. |
| Keywords: | Behavioral game theory; Learning; Global games; Neural networks; Agent-based computational economics; Simulations; Complex adaptive systems; Artificial intelligence |
| JEL: | C45 C70 C73 |
| Date: | 2009–08–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:16765&r=cmp |
| By: | Juha Honkatukia |
| Abstract: | Applied general equilibrium models have become a standard tool for the analysis of structural policies in many countries and international research organisations. Their use has been prompted by both developments in economics, but also on the growing need for quantitative policy analysis. The analysis of actual policy options mandates the use of numerical methods, but there are several other reasons to suggest the use of AGE models in particular. Chief among these is the applicability of models that rely on explicit optimisation on the analysis of welfare impacts of structural policies. It may also be the case that many policy issues are intractable by theoretical models, for example, when the policies concern several sectors of the economy or involve contradicting effects. This report describes the VATTAGE model used in VATT, the Government Institute for Economic Research. The model has been used to study the effects of tax policies and environmental policies on the economy. The model can also be used to study scenarios concerning the driving forces of economic growth and employment. The report contains a full description of the model code and its underlying theory. With the help of examples, it also shows how simulation results can be interpreted. |
| Keywords: | AGE models, simulation models |
| JEL: | H30 E60 C68 H20 |
| Date: | 2009–07–22 |
| URL: | http://d.repec.org/n?u=RePEc:fer:resrep:150&r=cmp |
| By: | Mathur , Sudhanshu; Morozov, Sergei |
| Abstract: | The rapid increase in the performance of graphics hardware, coupled with recent improvements in its programmability has lead to its adoption in many non-graphics applications, including wide variety of scientific computing fields. At the same time, a number of important dynamic optimal policy problems in economics are athirst of computing power to help overcome dual curses of complexity and dimensionality. We investigate if computational economics may benefit from new tools on a case study of imperfect information dynamic programming problem with learning and experimentation trade-off that is, a choice between controlling the policy target and learning system parameters. Specifically, we use a model of active learning and control of linear autoregression with unknown slope that appeared in a variety of macroeconomic policy and other contexts. The endogeneity of posterior beliefs makes the problem difficult in that the value function need not be convex and policy function need not be continuous. This complication makes the problem a suitable target for massively-parallel computation using graphics processors. Our findings are cautiously optimistic in that new tools let us easily achieve a factor of 15 performance gain relative to an implementation targeting single-core processors and thus establish a better reference point on the computational speed vs. coding complexity trade-off frontier. While further gains and wider applicability may lie behind steep learning barrier, we argue that the future of many computations belong to parallel algorithms anyway. |
| Keywords: | Graphics Processing Units; CUDA programming; Dynamic programming; Learning; Experimentation |
| JEL: | C63 C80 |
| Date: | 2009–07–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:16721&r=cmp |
| By: | Kristian Behrens; Giordano Mion; Yasusada Murata; Jens Südekum |
| Abstract: | We develop a new general equilibrium model of monopolistic competition with heterogeneous firms, variable demand elasticity and multiple asymmetric regions, in which trade integration induces wage and productivity changes. Using Canada-US interregional trade data, we structurally estimate a theory-based gravity equation system featuring endogenous wages and productivity. Given the estimated parameter values, we first decompose border effects into a pure border effect, relative and absolute wage effects, and a selection effect. We then quantify the impacts of removing the trade distortions generated by the Canada-US border on regional market aggregates such as wages, productivity, markups, the mass of varieties produced and consumed, as well as welfare. Last, we extend the counterfactual analysis to the firm level by generating productivity distributions and their changes via simulation. |
| Keywords: | firm heterogeneity, monopolistic competition, general equilibrium, endogenous markups, gravity equation system, counterfactual analysis |
| JEL: | F12 F15 F17 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0942&r=cmp |
| By: | Julio Raffo (Chaire en Economie et Management de l'Innovation, MTEI, CDM, Ecole Polytechnique Fédérale de Lausanne / CEPN, Université Paris Nord); Stéphane Lhuillery (Chaire en Economie et Management de l'Innovation, MTEI, CDM, Ecole Polytechnique Fédérale de Lausanne) |
| Abstract: | Patent statistics represent a critical tool for scholars, statisticians and policy makers interested in innovation and intellectual property rights. Many analyses are based on heterogeneous methods delineating the inventors’ or firms’ patent portfolios without questioning the quality of the method employed. We assess different heuristics in order to provide a robust solution to automatically retrieve inventors in large patent datasets (PATSTAT). The solution we propose reduces the usual errors by 50% and casts doubts on the reliability of statistical indicators and micro-econometric results based on common matching procedures. Guidelines for researchers, TTOs, firms, venture capitalists and policy makers likely to implement a names game or to comment on results based on a names game are also provided. |
| Keywords: | patents, inventors, names, matching algorithm, indicators, PATSTAT |
| JEL: | C63 C81 C88 O34 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:cmi:wpaper:cemi-workingpaper-2009-006&r=cmp |
| By: | Ahmed, Vaqar; O'Donoghue, Cathal |
| Abstract: | This paper studies the redistribution effect of personal income tax in Pakistan. We decompose the overall tax system in order to evaluate the contribution of rate, allowances, deductions, exemptions and credits. The structure given in Income Tax Ordinance, 2001, is applied to gross household incomes in 2002 (low growth year) and 2005 (high growth year). Our findings reveal that the reforms laid down in this Ordinance resulted in a greater redistribution of incomes. The redistributive effect increases as we move from 2002 to 2005 tax assessment. Deductions for salaried tax payers contribute the most towards progressivity. This is different from countries with advanced taxation systems relying mainly on allowances followed by tax rate and exemptions. |
| Keywords: | Income Taxation; Microsimulation; Redistribution; Inequality |
| JEL: | D3 D6 H2 |
| Date: | 2009–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:16700&r=cmp |
| By: | Skribans, Valerijs |
| Abstract: | This paper shows system dynamic model of labour market and labour migration in Latvia. The hypothesis of the research is: labour migration is determined primarily by the payment level in the countries under consideration and the indicator derived from it – payment differences in the countries compared; as well as employment level, unemployment level, number of work places (market capacity) and number of vacant work places. Secondary factors influencing migration may be costs connected with labour migration, formal legal barriers to migration and personal propensity to migrate. Statistics on the labour market in Latvia are not complete; there is also no common view of experts on determinant processes. In such circumstances market forecasting with quantitative methods is problematic. One approach is to simulate indicators and to estimate their influence on national economy. The model has three parts: growth (expansion) of labour force, division and migration sub models. The sub model for growth of labour force is based on division of population in various categories during transition to a working age population. Division by level of education is further used in labour market analysis in which worker groups are formed according to the education level. The paper represents mutual interaction of groups of workers as well as labour migration. The results show sensitivity of the model factors to propensity of personnel for labour migration. |
| Keywords: | system dynamic; labour migration; labour market; salary level |
| JEL: | F15 D0 F16 O1 C0 J0 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:16596&r=cmp |
| By: | Steinbacher, Matej; Steinbacher, Matjaz; Steinbacher, Mitja |
| Abstract: | In the paper, we simulate a heterogeneous-agent version of the wage-posting model as derived by Montgomery (1991) with homogeneous workers and differently-productive employers. Wage policy of particular employer is positively correlated with employer’s productivity level and the wage policy of the competitor. However, it is a less productive employer whose wage posting could also outweigh the posting of a more productive employer, though only temporarily. |
| Keywords: | Job-search model; Wage posting; Heterogeneous agents; Numerical optimization |
| JEL: | C78 J31 D83 C15 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:16706&r=cmp |