El Farol, Simulation, And Systems


This week we're going to do a fairly deep inspection of one of the classics of complexity literature, Arthur's El Farol problem. We are also going to read two articles that provide insight, beyond that provided by Zambrano's paper, about when and why you might use simulation in your research.


Be sure to refer to the questions below while you are reading; be prepared to discuss them in class.

  1. "Inductive reasoning and bounded rationality" by W. Brian Arthur, The American Economic Review, 84(2):406—411, May 1994. After reading this article, go to the NetLogo model of the El Farol. Read this Web page and then run the model in your browser.
  2. "The interplay between analytics and computation in the study of congestion externalities: The case of the El Farol Problem," by Eduardo Zambrano, Journal of Public Economic Theory, 6:375-395.
  3. "Beyond being in the lab: Using multi-agent modeling to isolate competing hypotheses," by Ning Nan, Erik W. Johnston, Judith S. Olson, Nathan Bos, CHI 2005 (April 2-7, 2005, Portland, OR), pp. 1693-6.
  4. "Agent-based modeling vs. equation-based modeling: A case study and users' guide," by H. Van Dyke Parunak, Robert Savit, Rick L. Riolo, Proceedings of Workshop on Modeling Agent-based systems (1998, Paris).

Be prepared to discuss the findings within each of the papers. Think about how they relate to what we've read before and how they relate to one another.

To do after class

  1. On your student page, add an essay that is your response to the question: "When and why would you do simulations instead of, or in addition to, mathematical analysis like neo-classical economics?"
Unless otherwise stated, the content of this page is licensed under Creative Commons Attribution-ShareAlike 3.0 License