Meeting Minutes - 15 April 2009

Today I presented the paper “Computational Intelligence in Economic Games and Policy Design” by Herbert Dawid, Han La Poutré, and Xin Yao (IEEE Computational Intelligence Magazine, 3(4), 22–26, 2008). The paper provides an overview of applications of computational intelligence techniques in economics. Both strong and weak points of the use of computational intelligence techniques are discussed. According to the authors, the two most important weak point are the issue of empirical validation and the issue of robustness.

I also discussed my own view on the relation between mainstream economics on the one hand and agent-based computational economics on the other hand. Due to the increasing popularity of experimental economics and evolutionary game theory, mainstream economics focuses more and more on bounded rationality and dynamic (rather than static) analysis. From this perspective, the difference between mainstream economics and agent-based computational economics is smaller than is sometimes thought. I argued that the main difference is between following a mathematical approach (as mainstream economics does) and following a simulation approach (as agent-based computational economics does). There is much to be gained by combining these two approaches. Today’s meeting ended with a discussion of the difference between mathematical analysis and computer simulation, and how this difference relates to the difference between deduction and induction in science. We also discussed the issue of implicit assumptions that are hidden in technical details in agent-based computational economics research.