Abstract
This paper describes a simulation which investigates the interaction and relative effectiveness of individualistic and social learning in producing workable budgeting strategies for agents with limited resources and bounded rationality. The simulation is motivated by an attempt to understand interview data collected from a sample of recently retired households about their budgeting behaviour. In particular, the simulation is designed to reflect, in simplified form, the information and decision processes typically available to individuals, given limitations of memory, accuracy and time for calculation. The paper also illustrates the inductive use of interview data as a basis for simulation, contrasting with the process of deductive modelling traditionally used for descriptions of economic activity. The simulation suggests that social learning is of considerable importance and leads to the emergence of differentiation in patterns of activity.
This research is part of Project L122–251–013 funded by the UK Economic and Social Research Council under their Economic Beliefs and Behaviour Programme.
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Chattoe, E., Gilbert, N. (1997). A Simulation of Adaptation Mechanisms in Budgetary Decision Making. In: Conte, R., Hegselmann, R., Terna, P. (eds) Simulating Social Phenomena. Lecture Notes in Economics and Mathematical Systems, vol 456. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-03366-1_33
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DOI: https://doi.org/10.1007/978-3-662-03366-1_33
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