What is an agent in economics?
An agent in economics is simply an actor who makes decisions within a model of some aspect of the economy. Every such agent solves either a well-defined or ill-defined optimization problem to reach a choice.
Questions about Agent (economics)
Short answers, pulled from the story.
Who are the common types of agents in macroeconomic models?
Macroeconomic models often distinguish households, firms, and governments or central banks as main types of agents. These entities may play multiple roles simultaneously within the same economic framework.
How does principal agent theory define an agent?
In principal agent models it refers strictly to someone delegated to act on behalf of a principal. This setup creates a situation where one party must trust another to execute tasks.
What is agent based computational economics?
Agent based computational economics uses corresponding agents that are computational objects modeled as interacting according to rules over space and time. These objects are not real people but programmed simulations designed to mimic behavior.
When do economists use representative agent models versus heterogeneous agent models?
An economic model assuming all agents of a given type are exactly identical is called a representative agent model. A model which recognizes differences among agents is instead called a heterogeneous agent model.