Capturing Continuous Economic Development from a Bottom-Up Exchange Process a Complex Adaptive Systems Model

Abstract

How do an economic system’s elementary components aggregate and affect the macro-level performance? How do changes to these micro-level components change the macro-level development of economic vitality? Prior research has not fully addressed these important questions. Built on the broad framework of complex adaptive systems, this research presents an agent-based model of economic exchanges that captures a bottom-up process with three interrelated elements: agents that comprise basic entities of actions, economic exchanges that represent the interactions and mutual adaptions of the agents, and an environment that structures the agents’ economic exchanges. We have developed a computer simulation program to quantitatively explore the macro-level performance of economic exchanges along with the variation of three elementary components. The experiments in this study have several findings of that indicate ways to sustain the economic system’s prosperity through managing the system’s micro-level components.