Agent-Based Modeling’s Open Methodology Approach: Simulation, Reflexivity, and Abduction

Abstract

This paper argues that agent-based modeling’s innovations in method developed in terms of simulation techniques also involve an improvement in economic methodology. It shows how Epstein’s generative science conception can be seen as departing from conventional methodological reasoning, and employs what I term an ‘open’ rather than ‘closed’ approach to economic methodology associated with the roles that reflexivity, counterfactual reasoning, and abduction play in ABM. Central to this idea is that improvements in how we know something, a matter of method, lead to improvements in whether we know something, a matter of methodology. The paper proposes an alternative view of economics and economic methodology employing a social science model of economics and contrasts this with standard economics’ traditional natural science model of economics. The paper discusses what this methodological understanding implies about the concept of emergence. The paper is intended to stimulate debate among ABM researchers regarding fundamental epistemological and ontological issues underlying simulation associated with the open-closed distinction.