Nonlinearity, Bounded Rationality, and Heterogeneity: Some Aspects of Market Economies as Complex Systems [Hardcover]

This book pursues a nonlinear approach in considering both chaotic dynamical models and agent-based simulation models of economics, as well as their dynamical behaviors. Three key concepts arising in this context are nonlinearity, bounded rationality and heterogeneity, which also make up the title of the book. Nonlinearity is the warp that runs throughout all models because systems that exhibit chaotic or other complex behavior in the absence of any exogenous disturbances are absolutely nonlinear. Bounded rationality constitutes the woof, because economic systems do not exhibit complex behavior if all agents are perfectly rational, as is usually assumed in neoclassical economics. Agents who are boundedly rational have to struggle to do their best with limited information and tend to adapt to their economic environment without knowing what is the best. Furthermore, the heterogeneity of firms or consumers dyes the fabric of complex dynamics woven from the warp and woof.Part I?? NONLINEAR ECONOMIC DYNAMICS ? Chapter 1? The Nature and Significance of Nonlinear Economic Dynamics? Chapter 2? One-Dimensional Nonlinear Cobweb Model with Adaptive Production Adjustment? Chapter 3? Two-Dimensional Nonlinear Cobweb Model with Heterogeneous Producers? Chapter 4? N-Dimensional Globally Coupled Map of Nonlinear Cobweb Model Part II?? AGENT-BASED SIMULATION ? Chapter 5? From Nonlinear Economic Dynamics to Complexity Economics? Chapter 6? Agent-Based Simulation Model of Market Structure Dynamics I? Chapter 7? Agent-Based Simulation Model of Market Structure Dynamics IIThis book pursues a nonlinear approach in considering both chaotic dynamical models and agent-based simulation models of economics, as well as their dynamical behaviors. Three key concepts arising in this context are nonlinearity, bounded rationality and heterogeneity, which also make up the title of the book. Nonlinearity is the warp that runs throughout all models because systems that exhibit chaotic or oló‡