1. Agents as Methodology: Some Speculations
Rob Axtell

2. Outline
Topic 1: Price of computing is falling very (exponentially) fast!
Topic 2: How can we compete with the next generation of ACEs who will have a terabyte of RAM on the laptops?
Topic 3: If we could build SimEverything would it change anything/everything?
Topic 4: Are there any general principles of economics that are always and everywhere true?

3. Price of Computing Facts?
Mathematics and computing as substitutes
Fixed price of mathematics
Declining price of computing
Substitution effect: reasonably clear
Income effect: could computing be a null commodity (neither a ‘good’ nor a ‘bad)?
Will we see an exponential migration to computer utilization and computational expression?

4. Capital Stock Turnover
Given substitution of computation for mathematics, how will human capital stocks respond?
Will there be orderly turnover or will the overinvestment unwind in a disorderly way?
Could turmoil end in global devaluation of the currency or only local losses?

5. Moore's Law, I
Mainframes c (first microsimulation models): 16 Kilobytes core memory
Desktop microcomputers c. 1990: 16 Megabytes RAM
Laptops c. 2000: 1/2 Gigabyte RAM
Notebooks c. 2010: 16 Gigabytes RAM
Handhelds (?) c. 2020: 1/2 Terabyte RAM?
??? c. 2030: 16 Terabytes RAM?
 1.6 x 1013 bytes/105 bytes/agent = 108 agents

6. Moore's Law, II Desktops c. 1990: 16 Megabytes RAM
Desktops c. 2000: 1.6 Gigabyte RAM
Desktops c. 2005: 16 Gigabytes RAM
Desktops c. 2010: 160 Gigabytes RAM?
Desktops c. 2015: 1.6 Terabytes RAM?
Desktops c. 2020: 16 Terabytes RAM?
Desktops c. 2025: 160 Terabytes RAM?
Desktops c. 2030: 1.6 Petabytes RAM?
 1.6 x 1015 bytes/106 bytes/agent = 109 agents

7. How Can We Compete with our future selves?
In my humble opinion (IMHO):
Sugarscape is hopelessly outdated…
…but the Anasazi model will stand for some time
The current generation of artificial financial markets will be improved upon…
…but soon we will have very realistic simulations
Necessary condition for success: data
Pick problems that can be scaled to available resources

8. Sim Everything
Say the economics or finance minister of your country came to you and said: “The Americans are building a computer model of the whole world, and we want you to build one for us.”
What would you say or do?
Laugh?
Say you want to hear more?
Commit to doing it but you will need a research team and $10 million/year of research support
plus money for a Summer School!!

9. Revenge of Homo Economicus
Imagine a population that wears arbitrary amounts of computing power
What could they do that we cannot?
Get good prices on airline tickets?
Know exactly when to buy and sell equities?
Figure out what lottery numbers to bet on?
Maybe institutions become more sophisticated and people turn over some autonomy

10. If everything can be simulated...
…are there really any general economic principles that are universally valid?
‘law of one price’?
‘competition picks better products’ …
Are there any empirical ‘laws’ in economics?
Or, is everything contingent, context dependent, relative and conditional?

11. Our Non-Elephants Non-Walrasian markets: Non-Coasian firms:
Decentralized exchange (including networks)
ZI exchange
Non-Coasian firms:
Multi-agent firms
Non-Nash game theory:
Adaptive agents, who avoid/eschew fixed points and perpetually seek utility gains

12. Not the End... but the Beginning
Thank you all for a great Summer School!