Agent-Based Computational Economics (ACE)

Agent-Based Computational Economics (ACE) is an approach that models economies by simulating many individual decision-makers, called agents, each with their own behaviors and strategies. These agents interact within a virtual environment, allowing researchers to observe how their actions lead to emergent economic patterns and outcomes. Unlike traditional models that assume all agents behave perfectly rationally, ACE captures complex dynamics like learning, adaptation, and cooperation. This helps in understanding real-world economic phenomena, such as market fluctuations and the impact of policies, through detailed, bottom-up simulation of individual behaviors.