TY - GEN
T1 - An Agent-Based Approach to Classical Competitive Prices
AU - Cogliano, Jonathan F.
AU - Veneziani, Roberto
AU - Yoshihara, Naoki
N1 - Publisher Copyright:
© 2022, The Author(s), under exclusive license to Springer Nature Switzerland AG.
PY - 2022
Y1 - 2022
N2 - This paper develops a novel agent-based computational simulation of the classical competitive process and price formation. The simulation consists of many capitalists who make decisions of how to allocate capital across industries, and workers who sell their labour-power to capitalists. Capitalists make independent decisions of which good(s) to produce and engage in decentralised exchange with one another to obtain other goods needed for future production. Decisions of how to allocate capital across sectors are based on comparisons of capitalists’ individual profit rates to industry averages. The ongoing migration of capital across industries captures key elements of the classical competitive process and formation of long-period competitive prices as centres of gravity for the movement of market prices. The simulation approach allows for a detailed study of the range of exchange dynamics and allocation decisions that are consistent with the formation of classical competitive prices, and adds further detail to the received theory of the classical long-period equilibrium.
AB - This paper develops a novel agent-based computational simulation of the classical competitive process and price formation. The simulation consists of many capitalists who make decisions of how to allocate capital across industries, and workers who sell their labour-power to capitalists. Capitalists make independent decisions of which good(s) to produce and engage in decentralised exchange with one another to obtain other goods needed for future production. Decisions of how to allocate capital across sectors are based on comparisons of capitalists’ individual profit rates to industry averages. The ongoing migration of capital across industries captures key elements of the classical competitive process and formation of long-period competitive prices as centres of gravity for the movement of market prices. The simulation approach allows for a detailed study of the range of exchange dynamics and allocation decisions that are consistent with the formation of classical competitive prices, and adds further detail to the received theory of the classical long-period equilibrium.
KW - Agent-based model
KW - Classical competition
KW - Computational simulation
KW - Prices of production
UR - https://www.scopus.com/pages/publications/85128758170
UR - https://www.scopus.com/pages/publications/85128758170#tab=citedBy
U2 - 10.1007/978-3-030-96188-6_11
DO - 10.1007/978-3-030-96188-6_11
M3 - Conference contribution
AN - SCOPUS:85128758170
SN - 9783030961879
T3 - Springer Proceedings in Complexity
SP - 152
EP - 163
BT - Proceedings of the 2021 Conference of the Computational Social Science Society of the Americas
A2 - Yang, Zining
A2 - von Briesen, Elizabeth
PB - Springer Science and Business Media B.V.
T2 - Annual conference of the Computational Social Science Society of the Americas, CSSSA 2021
Y2 - 4 November 2021 through 7 November 2021
ER -