Complex network effects on price setting: an agent-based computational approach

Authors

DOI:

https://doi.org/10.1590/1980-53575311rhj

Keywords:

Agent-based model, Complex networks, Price setting

Abstract

We present an adaptation of a new Keynesian model into an agent-based computational model, accounting for the importance of heterogeneity, interaction and bounded rationality in problems such as price setting and expectations formation. We evaluate the evolution of the distribution of price setting strategy frequencies, which agents might choose on each period
between inflationary, neutral or deflationary, a process based on private and social features of
agents’ utility functions. In addition, we consider the network’s topological structure and find that the regular network model fails in replicating exactly the new Keynesian model’s original results, while the complex network model presents results in accordance with the originals.

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Author Biographies

  • Rafael Jasper Feltrin, Universidade Federal de Santa Catarina

    Graduate Program in Economics

  • Helberte João França Almeida, Universidade Federal de Santa Catarina

    Professor

  • Jaylson Jair da Silveira, Universidade Federal de Santa Catarina

    Professor

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Published

30-03-2023

Issue

Vol. 53 No. 1 (2023)

Section

Articles

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Copyright (c) 2023 Rafael Jasper Feltrin, Helberte João França Almeida, Jaylson Jair da Silveira

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How to Cite

Feltrin, R. J., Almeida, H. J. F., & Silveira, J. J. da. (2023). Complex network effects on price setting: an agent-based computational approach. Estudos Econômicos (São Paulo), 53(1), 7-40. https://doi.org/10.1590/1980-53575311rhj