Agent-Based Models in Development Economics

Abstract

In this article I discuss the potential role of agent-based modeling techniques in development economics. Development economics has recently seen a strong rise of experimental evidence from the field and the laboratory. At the same time, there is a debate on how theory should adapt to this new approach and its findings. I argue in this paper that the agent-based modeling approach is a promising complement to the traditional modeling techniques, as it can easily incorporate the non-standard findings of the experimental literature. Moreover, I emphasize the opportunity of a mutually beneficial interplay between experiment based empirical research and agent-based models.