Genetic algorithms in economics: Difference between revisions

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{{Mergeto|Genetic algorithm|date=December 2010}}

{{Main|genetic algorithm}}

'''[[Genetic algorithm]]s''' have increasingly been applied to economics oversince the lastpioneering twowork decadesby John H.{{when?|date=April 2012}}Miller in 1986. It has been used to characterize a variety of models including the [[cobweb model]], the [[overlapping generations model]], [[game theory]], [[Genetic algorithm scheduling|schedule optimization]] and [[asset pricing]]. Specifically, it has been used as a model to represent learning, rather than as a means for fitting a model.

== Genetic algorithm in the cobweb model ==

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After all agents have made a quantity production decision, the quantities are aggregated and plugged into a demand function to get a price. Each firm's profit is then calculated. Fitness values are then calculated as a function of profits. After the offspring pool is generated, hypothetical fitness values are calculated. These hypothetical values are based on some sort of estimation of the price level, often just by taking the previous price level.

==See also==

*{{slink|List of genetic algorithm applications #Finance and Economics}}

== References ==

* J H Miller, 'A Genetic Model of Adaptive Economic Behavior', University of Michigan working paper, 1986.

* J Arifovic, 'Learning by Genetic Algorithm in Economic Environments', PhD Thesis, University of Chicago, 1991.

* J Arifovic, 'Genetic Algorithm Learning and the Cobweb Model ', Journal of Economic Dynamics and Control, vol. 18, Issue 1, (January 1994), 3–28.

* R Hoffmann, 'The independent localisations of interaction and learning in the repeated prisoner's dilemma', Theory and Decision, vol. 47, p. 57–72, 1999.

* R Hoffmann, 'The ecology of cooperation', Theory and Decision, vol. 50, Issue 2. p. 101–118, 2001.

==External links==

* [httphttps://www.sfu.ca/crabe/ Centre for Adaptive Behaviour in Economics]

* [httphttps://wwwwww2.econ.iastate.edu/tesfatsi/getalife.htm Agent-Based Computational Economics and Artificial Life: A Brief Intro]

[[Category:Computational economics]]

[[Category:Production economics]]

[[Category:Econometrics]]

[[Category:Genetic algorithms]]

[[Category:Optimization algorithms and methods]]