Complex Adaptive Systems: An Introduction to Computational Models of Social Life (Princeton Studies in Complexity Book 14)

by John H. Miller

In economics, formal modeling usually proceeds by developing mathematical models derived from first principles. This approach, when well practiced, results in very clean and stark models that yield key insights. Unfortunately, while such a framework imposes a useful discipline on the modeling, it also can be quite limiting. The formal mathematical approach works best for static, homogeneous, equilibrating worlds. Even in our very simple example, we are beginning to violate these desiderata. Thus, if we want to investigate richer, more dynamic worlds, we need to pursue other modeling approaches. The trade-off, of course, is that we must weigh the potential to generate new insights against the cost of having less exacting analytics.