A Genetic Model of Adaptive Economic Behavior
John H. Miller
Key Words:
Artificial Adaptive Agents, Genetic Algorithm, Economic Theory, Learning, Adaptation
A model of adaptive economic behavior is developed and analyzed. The model, by relying on specific biological concepts, reduces the ambiguity which has confounded previous biological-based models, and has sufficient structure to be explicitly explored. The basic assumptions of the model are examined, and they appear to accord well with current economic and psychological theories of behavior. Furthermore, the theoretical properties of the model are derived based on recent work in computer science. These properties indicate that the basic model has a strong optimization component, which suggests that the optimization and adaptive approaches are not mutually exclusive theoretical milieus. The model is applied to a variety of economic problems, and its implications are derived and analyzed.