Herbert Simon and Agent-Based Computational Economics

Herbert Simon was a quintessential interdisciplinary scholar who made pioneering contributions concerning the notion of bounded rationality, built models based on it, and made important advances in understanding complex systems. His importance in the field of artificial intelligence, which was in turn the inspiration of agent-based computational economics (ACE), is discussed in detail in Chen (2005). Among all the Nobel Laureates in Economics, there are at least three whose work has been acknowledged by the ACE community. They are Friedrich Hayek (1899–1992), Thomas Schelling (1921-), and Elinor Ostrom (1933–2012). The last two worked directly on ACE. Schelling’s celebrated work on the segregation model is considered one of earliest publications on ACE (Schelling, 1971). Ostrom contributed to the development of empirical agent-based models (Janssen and Ostrom, 2006). Hayek did not work on ACE, but the connection of his work to ACE has been pointed out by Vriend (2002).