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Simulation of economic actors using limitedly rational autonomous agents

We model individual economic actors using intelligent agents, then allow the agents self-interestedly to choose what products to produce and consume. All transactions are voluntary. Use of agents, rather than statistical demand and supply functions, enables the direct computation of every action by every agent, thus permitting the tracing of all economic activities to the principled behavior embedded in the agents. Another feature of this work is that the agents carefully manage self-reflection (i.e., they balance thinking about what they will do with actually doing it). An economy emerges as the summation of the actions of the participating agents. Equilibrium is reached when the aggregate supply of goods and services equals the aggregate demand for them, both in terms of type and of quantity. We thus have the ability to tie aggregate activity to individual decisions, giving us a general equilibrium model based on methodological individualism. Equilibrium modeling has in the past invariably ignored the existence and behavior of individual actors. We demonstrate one method of addressing this deficit. We focus on the emergence of organizations to manage coordinated applications of resources.