Agent - based and Macroscopic Modeling
Agent - based and Macroscopic Modeling

Summary/Abstract: Purpose – The focus of this contribution is the correspondence between collective behavior and inter-individual interactions in the complex socio-economic systems. Currently there is a wide selection of papers proposing various models for the both collective behavior and inter-individual interactions in the complex socio-economic systems. Yet the papers directly relating these two concepts are still quite rare. By studying this correspondence we discuss a cutting edge approach to the modeling of complex socio-economic systems. Design/methodology/approach – The collective behavior is often modeled using stochastic and ordinary calculus, while the inter-individual interactions are modeled using agent-based models. In order to obtain the ideal model, one should start from these frameworks and build a bridge to reach another. This is a formidable task, if we consider the top-down approach, namely starting from the collective behavior and moving towards inter-individual interactions. The bottom-up approach also fails, if complex inter-individual interaction models are considered, yet in this case we can start with simple models and increase the complexity as needed. Findings – The bottom-up approach, considering simple agent-based herding model as a model for the inter-individual interactions, allows us to derive certain macroscopic models of the complex socio-economic systems from the agent-based perspective. This provides interesting insights into the collective behavior patterns observed in the complex socio-economic systems.

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