ECO4031X
- Computational Political Economy
Course Information
Instructors
Overview
In this course, we focus on the ways in which the institutions in a society
affect the individual and aggregate outcomes in that society, and in turn, how
individual and collective actions affect and transform such institutions. In
particular, we are interested in the process of institutional change, and why it
is that institutional changes tends to be infrequent yet dramatic, such as the
sudden collapse of communism or the demise of apartheid after decades of
persistence.
In explaining this, we adopt an evolutionary modelling approach which takes
seriously the role of non-contractual social interactions, adaptive agents with
social preferences, and generalised increasing returns (or positive feedbacks)
in the process of institutional change. The aim of this course is to introduce
students to some of the more recent advances that have been made in the fields
of behavioural and institutional economics in this regard.
Since many of the models well be considering make substantial deviations
from standard game theoretic approaches (for examples, agents have endogenous
evolving preferences and finite lifespan), the mathematical machinery to make
them fully tractable is not yet developed. We therefore turn to simulation
methods in order to study the emergent properties of our models. This approach
to modelling differs from others you may have encountered in economic theory, as
it takes a macroscopic view of behaviours and institutions. That is, unlike the
approach taken in macroeconomics where one uses aggregate state variables
described through ordinary differential equations to say things about
macro-level outcomes, we are interested in what happens at the macro level when
you specify as completely as possible, the preferences and rules of engagement
of agents at the micro-level. To accomplish this, roughly half of the course is
an introduction to agent-based models of social processes. The basic idea is to
create an artificial society comprised of agents, environments, resource
endowments, and rules of behaviour, and then to observe which social structures
and group behaviours form and dissipate in a world (much like the real-world)
that is in a constant state of flux.
The metaphor of a macroscope is illuminating: these artificial societies are
merely laboratories where we attempt to grow certain social structures using
programming techniques, the idea being to discover fundamental local rules that
are sufficient to produce robust macro-level outcomes.
Texts
While the course material is drawn from a variety of sources, we will make
substantial use of the following two texts, each dealing with the theoretical
and computational components respectively:
- Bowles, S. (2004) Microeconomics: Behaviour, Institutions and
Evolution, Princeton University Press, Princeton: NJ.
- Gaylord R.J., and L.J. DAndria (2004) Simulating Society: a
mathematica toolkit for modeling socioeconomic behaviour, Springer-Verlag,
New York.
Software
We will make use of Mathematica, version 5. The software is loaded on the
economics postgrad lab as well as Comlab J. While the course requires no
past-programming experience, students should bear in mind that the course is
strongly quantitative in focus. Students who successfully complete the course
will have an intermediate-to-advanced level of programming competence in
Mathematica. Students who have a strong interest in computer programming will
benefit most from the lab sessions.
Evaluation
The final mark in this course will be comprised as follows:
- Assignments: 25%
- Midterm exam: 25%
- Final exam: 50%
There will be 5 assignments/hand-ins, each worth 5%. These hand-ins may
comprise critical commentary on assigned readings, problem sets as well as short
simulation exercises. These hand-ins will be due on Monday at noon in Week 3,
Week 5, Week 8, Week 10 and Week 12 of the course. Questions related to
these hand-ins will be given to students in the lecture/lab session in the
preceding week.
Syllabus
Click here to
download the PDF file containing both the 2005 course outline and the syllabus.
(15/08/2004)
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