Validation of Agent-Based Models in Economics and Finance

Since the survey by Windrum et al. (Journal of Artificial Societies and Social Simulation 10:8, 2007), research on empirical validation of agent-based models in economics has made substantial advances, thanks to a constant flow of high-quality contributions. This Chapter attempts to take stock of such recent literature to offer an updated critical review of the existing validation techniques. We sketch a simple theoretical framework that conceptualizes existing validation approaches, which we examine along three different dimensions: (i) comparison between artificial and real-world data; (ii) calibration and estimation of model parameters; and (iii) parameter space exploration. Finally, we discuss open issues in the field of ABM validation and estimation. In particular, we argue that more research efforts should be devoted toward advancing hypothesis testing in ABM, with specific emphasis on model stationarity and ergodicity

Reply to Hearty and Tormey: Use the scientific method to test geologic hypotheses, because rocks do not whisper

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MIS 5e relative sea-level changes in the Mediterranean Sea: Contribution of isostatic disequilibrium

Sea-level indicators dated to the Last Interglacial, or Marine Isotope Stage (MIS) 5e, have a twofold value. First, they can be used to constrain the melting of Greenland and Antarctic Ice Sheets in response to global warming scenarios. Second, they can be used to calculate the vertical crustal rates at active margins. For both applications, the contribution of glacio- and hydro-isostatic adjustment (GIA) to vertical displacement of sea-level indicators must be calculated. In this paper, we re-assess MIS 5e sea-level indicators at 11 Mediterranean sites that have been generally considered tectonically stable or affected by mild tectonics. These are found within a range of elevations of 2–10 m above modern mean sea level. Four sites are characterized by two separate sea-level stands, which suggest a two-step sea-level highstand during MIS 5e. Comparing field data with numerical modeling we show that (i) GIA is an important contributor to the spatial and temporal variability of the sea-level highstand during MIS 5e, (ii) the isostatic imbalance from the melting of the MIS 6 ice sheet can produce a >2.0 m sea-level highstand, and (iii) a two-step melting phase for the Greenland and Antarctic Ice Sheets reduces the differences between observations and predictions. Our results show that assumptions of tectonic stability on the basis of the MIS 5e records carry intrinsically large uncertainties, stemming either from uncertainties in field data and GIA models. The latter are propagated to either Holocene or Pleistocene sea-level reconstructions if tectonic rates are considered linear through time

Giant boulders and Last Interglacial storm intensity in the North Atlantic

As global climate warms and sea level rises, coastal areas will be subject to more frequent extreme flooding and hurricanes. Geologic evidence for extreme coastal storms during past warm periods has the potential to provide fundamental insights into their future intensity. Recent studies argue that during the Last Interglacial (MIS 5e, ∼128–116 ka) tropical and extratropical North Atlantic cyclones may have been more intense than at present, and may have produced waves larger than those observed historically. Such strong swells are inferred to have created a number of geologic features that can be observed today along the coastlines of Bermuda and the Bahamas. In this paper, we investigate the most iconic among these features: massive boulders atop a cliff in North Eleuthera, Bahamas. We combine geologic field surveys, wave models, and boulder transport equations to test the hypothesis that such boulders must have been emplaced by storms of greater-than-historical intensity. By contrast, our results suggest that with the higher relative sea level (RSL) estimated for the Bahamas during MIS 5e, boulders of this size could have been transported by waves generated by storms of historical intensity. Thus, while the megaboulders of Eleuthera cannot be used as geologic proof for past “superstorms,” they do show that with rising sea levels, cliffs and coastal barriers will be subject to significantly greater erosional energy, even without changes in storm intensity