Utility maximization with a weakly separable utility function requires a consumer create an optimal budget for each separable subgroup. We show that computational complexity of optimal budgeting is the maximum of an exponential in the number of alternatives and a quadratic in the number of...

Full instrumental rationality and perfect institutions are two cornerstone assumptions underlying neoclassical models. However, in the real world, these two assumptions never hold, especially not in developing countries. In this paper, we develop a game theoretical model to investigate if...

This paper describes the potential application of a US Department of Defense-developed simulation architecture to the domain of economic and financial simulation. This approach, known as the High Level Architecture (HLA) for Simulation Interoperability, provides the ability to link disparate...

This paper addresses problems due to approximation of dynamical systems. The approach presented here is based on the notion of the shadowing property of a dynamical system and on the use of pseudotrajectories to approximate true orbits. In particular, specific results in the case of attractors...

It is argued that, due to the complexity of most economic phenomena, the chances of deriving correct models from a priori principles are very small. Instead, a more descriptive approach to modelling should be pursued. Agent-based modelling is characterised as a step in this direction. However...

This paper extends the literature on the evolution of norms with an agent-based model capturing a phenomenon that has been essentially ignored, namely that individual thought--or computing--is often inversely related to the strength of a social norm. Once a norm is entrenched, we conform...

We propose to apply to the simulation of general nonlinear rational-expectation models a method where the expectation functions are approximated through a higher-order Taylor expansion. This method has been advocated by Judd (1998) and others for the simulation of stochastic optimal-control...

This paper introduces a valuation model of international pricing in the presence of political risk. Shipments between countries are charged with shipping costs and the country specific production processes are modelled as diffusion processes. The political risk is modelled as a continuous time...

In this note, we introduce a new continuously differentiable merit function for solving variational inequalities. Our function is closely related to the augmented Lagrangian function for nonlinear optimization problems. We solve two equilibrium problems and obtain numerical results making use of...

Many economic and social systems are essentially large multi-agent systems. By means of computational modeling, the complicated behavior of such systems can be investigated. Modeling a multi-agent system as an evolutionary agent system, several important choices have to be made for evolutionary...