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http://dspace.mediu.edu.my:8181/xmlui/handle/10261/1843| Title: | Does bounded rationality lead to individual heterogeneity? The impact of the experimentation process and of memory constraints |
| Keywords: | Bounded rationality Genetic algorithms Individual heterogeneity |
| Description: | In this paper we explore the effect of bounded rationality on the convergence of individual behavior toward equilibrium. In the context of a Cournot game with a unique and symmetric Nash equilibrium, firms are modeled as adaptive economic agents through a genetic algorithm. Computational experiments show that (1) there is remarkable heterogeneity across identical but boundedly rational agents; (2) such individual heterogeneity is not simply a consequence of the random elements contained in the genetic algorithm; (3) the more rational agents are in terms of memory abilities and pre-play evaluation of strategies, the less heterogeneous they are in their actions. At the limit case of full rationality, the outcome converges to the standard result of uniform individual behavior. |
| URI: | http://dspace.mediu.edu.my:8181/xmlui/handle/10261/1843 |
| Other Identifiers: | http://hdl.handle.net/10261/1843 |
| Appears in Collections: | Digital Csic |
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