Toward an Autonomous-Agents Inspired Economic Analysis

This paper demonstrates the potential role of autonomous agents in economic theory. We first dispatch autonomous agents, built by genetic programming, to double auction markets. We then study the bargaining strategies discovered by them, and from there an autonomous-agent-inspired economic theory with regard to the optimal procrastination is derived.Agent-Based Double Auction Markets, Autonomous Agents, Genetic Programming, Bargaining Strategies, Monopsony, Procrastination Strategy

Agent-Based Modeling of the Prediction Markets

We propose a simple agent-based model of the political election prediction market which reflects the intrinsic feature of the prediction market as an information aggregation mechanism. Each agent has a vote, and all agents’ votes determine the election result. Some of the agents participate in the prediction market. Agents form their beliefs by observing their neighbors’ voting disposition, and trade with these beliefs by following some forms of the zero-intelligence strategy. In this model, the mean price of the market is used as a forecast of the election result. We study the effect of the radius of agents’ neighborhood and the geographical distribution of information on the prediction accuracy. In addition, we also identify one of the mechanisms which can replicate the favorite-longshot bias, a stylized fact in the prediction market. This model can then provide a framework for further analysis on the prediction market when market participants have more sophisticated trading behavior.Prediction market, Agent-based simulation, Information aggregation mechanism, Prediction accuracy, Zero-intelligence agents, Favorite-longshot bias

The relationships between corruption and pollution on corruption regimes

Previous studies have focused mainly on the effect of corruption on pollution. The results of these studies show an inverted U-shaped relationship between economic growth and pollution. In addition, some researchers have suggested that corruption plays an important role in determining pollution. This study proposes the hypothesis of a nonlinear long-run relationship between pollution and corruption. The goal of the study is to investigate the threshold cointegration effect of pollution on corruption using panel data for 62 countries over the period from 1997 to 2004. The results show that the effect of the Corruption Perceptions Index (CPI) on pollution is insignificant in low-corruption regimes. This implies that corruption does not slow down environmental pollution in countries with low corruption. The impact of the CPI on environmental pollution is also insignificant in high-corruption regimes. This result implies that corruption has no adverse impact on environmental pollution in countries with high corruption.Corruption, Pollution, Threshold, Error-Correction Model

Social Norm, Costly Punishment and the Evolution to Cooperation

Both laboratory and field evidence suggest that people tend to voluntarily incur costs to punish non-cooperators. While costly punishment typically reduces the average payoff as well as promotes cooperation. Why does the costly punishment evolve? We study the role of punishment in cooperation promotion within a two-level evolution framework of individual strategies and social norms. In a population with certain social norm, players update their strategies according to the payoff differences among different strategies. In a longer horizon, the evolution of social norm may be driven by the average payoffs of all members of the society. Norms differ in whether they allow or do not allow for the punishment action as part of strategies, and, for the former, they further differ in whether they encourage or do not encourage the punishment action. The strategy dynamics are articulated under different social norms. It is found that costly punishment does contribute to the evolution toward cooperation. Not only does the attraction basin of cooperative evolutionary stable state (CESS) become larger, but also the convergence speed to CESS is faster. These two properties are further enhanced if the punishment action is encouraged by the social norm. This model can be used to explain the widespread existence of costly punishment in human society.social norm; costly punishment; cooperative evolutionary stable state; attraction basin; convergence speed