Friday, December 12, 2014

Agent-Based Modeling and the Vindication of Ludwig von Mises

Gene Callahan writes:
I've been reading agent-based modelling (ABM) literature the last week, and I am struck by its vindication of Mises's vision of economics. It turns out that to get phenomena like markets, firms, and market-clearing prices, the modelers only have to build agents that:

1) have a purpose
2) have some idea how to achieve it, even if that idea is sub-optimal
3) interact with other agents; and
4) face scarce resources.

Well, folks, this is nothing less than the basis of Mises's much reviled "praxeology."

Murray Rothbard on Mises and praxeology in 36 seconds, here.

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