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On the Role of Agent‐based Modeling in the Theory of Development Economics

Review of Development Economics

Published online on

Abstract

In this article I discuss the potential role of agent‐based modeling techniques in development economics. Development economics has recently seen a strong rise of experimental evidence from the field and the laboratory. At the same time, there is a debate on how theory should adapt to this new approach and its findings. I argue in this paper that the agent‐based modeling approach is a promising complement to the traditional modeling techniques, as it can easily incorporate the non‐standard findings of the experimental literature. Moreover, I emphasize the opportunity of a mutually beneficial interplay between experiment‐based empirical research and agent‐based models.