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Agent Based Modelling CambridgeElements

This document provides a non-technical overview of Agent-Based Modelling (ABM), a methodology applicable in economics and various natural and social sciences. It discusses the historical background, tools, and characteristics of ABM, emphasizing advanced topics like validation and sensitivity analysis. The Element aims to introduce students and scholars to ABM, highlighting its relevance in analyzing complex systems populated by heterogeneous interacting agents.

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Agent Based Modelling CambridgeElements

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Gallegati et al.

This Element works as non-technical overview of Agent-

Based Modelling (ABM), a methodology which can be applied
to economics, as well as fields of natural and social sciences.
This Element presents the introductory notions and historical
background of ABM, as well as a general overview of the tools
and characteristics of this kind of models, with particular Complexity and
focus on more advanced topics like validation and sensitivity
analysis. Agent-based simulations are an increasingly popular Agent-Based Economics
methodology which fits well with the purpose of studying
problems of computational complexity in systems populated by
heterogeneous interacting agents.

Agent-Based Modelling
Agent-Based
Modelling
About the Series Series Editors
Elements in Complexity and Giovanni Dosi
Agent‑Based Economics will present Sant’Anna School of
the state-of-the-art in complexity Advanced Studies
and agent-based economics with
the aim of offering a systematic
and easy-to-access thematic
Mauro Gallegati
Università Politecnica Mauro Gallegati,
Simone Landini and
delle Marche,
organization of both consolidated Ancona
results, and the latest developments
Simone Landini
in the fields. Contributions are
meant both as a support to scholarly
research and as teaching tools.
IRES Piemonte,
Torino
Giacomo Gallegati
Maria Enrica Virgillito
Sant’Anna School of
Advanced Studies

Cover image: Matt LaVigne/500px/

500px/Getty images ISSN 2732-5067 (online)
ISSN 2732-5059
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Elements in Complexity and Agent-Based Economics
edited by
Giovanni Dosi
Sant’Anna School of Advanced Studies
Mauro Gallegati
Università Politecnica delle Marche, Ancona
Simone Landini
IRES Piemonte, Torino
Maria Enrica Virgillito
Sant’Anna School of Advanced Studies

AGENT-BASED MODELLING

A Tool for Complexity

Mauro Gallegati
Università Politecnica delle Marche, Ancona
Simone Landini
IRES Piemonte, Torino
Giacomo Gallegati
Università degli Studi di Torino, Collegio Carlo
Alberto, Torino, and Université Paris
1 Panthéon-Sorbonne, Paris

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DOI: 10.1017/9781009547628
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A Tool for Complexity

Elements in Complexity and Agent-Based Economics

DOI: 10.1017/9781009547628
First published online: November 2024

Mauro Gallegati
Università Politecnica delle Marche, Ancona
Simone Landini
IRES Piemonte, Torino
Giacomo Gallegati
Università degli Studi di Torino, Collegio Carlo Alberto, Torino,
and Université Paris 1 Panthéon-Sorbonne, Paris
Author for correspondence: Simone Landini, [email protected]

Abstract: This Element works as non-technical overview of

Agent-Based Modelling (ABM), a methodology which can be applied
to economics, as well as ﬁelds of natural and social sciences. This
Element presents the introductory notions and historical background
of ABM, as well as a general overview of the tools and characteristics of
this kind of models, with particular focus on more advanced topics like
validation and sensitivity analysis. Agent-based simulations are an
increasingly popular methodology which ﬁts well with the purpose
of studying problems of computational complexity in systems
populated by heterogeneous interacting agents.

Keywords: agent, networks, simulation platforms, validation, sensitivity

analysis

JEL classiﬁcations: C15, C52, C63, D85, E17, E27, E37, E47, F17, F47, G17, H30,
L14

© Mauro Gallegati, Simone Landini and Giacomo Gallegati 2024

ISBNs: 9781009547635 (HB), 9781009547611 (PB), 9781009547628 (OC)
ISSNs: 2732-5067 (online), 2732-5059 (print)

Introduction 1

1 Agent-Based Modelling 2

2 Tools for the Simulation with Models

Based on Agents 16

3 Conclusion 37

References 40

Introduction
This Element is about Agent-Based Modelling (ABM) as a tool for the analysis of
socioeconomic complex systems. In this respect it can be considered as the
‘natural twin’ of Landini et al. (2024) about complexity in economics.
The main aim of this Element is to introduce students and scholars to the
ABM world, which is a growing stream of research with many applications in
different fields within the natural and the social sciences. After reading this
Element, the reader will not be able to specify a model based on agents but will
have a synthetic and overall view of the main notions and topics of ABM, and
how and why they are related to complex systems analysis.
One main point of this Element is to be an accessible guide to taking the first
steps in the field. Starting from the main notions and with some historical
background, without technicalities, the main tools of ABM, general characteris-
tics, and practices are discussed. A second point is to provide a rich and up-to-date
collection of references for further developments: students will largely benefit
from the references.
Working with ABM requires modelling, either formal or computational, and
computer programming skills. Not only that, but as in any kind of modelling
activity, it also requires abstraction capabilities without transforming the
research problem into a mathematical or computing problem, that is, without
falling into the formalist-computational trap into which mainstream economics
has fallen (Landini et al., 2020). Differently said, even though a model based on
agents consists of an artificial simulation of a real phenomenon, the goal is
reaching a deeper knowledge of facts, especially when these cannot be studied
with repeated experiments for events that cannot be replicated. To this end,
formalistic abstraction is useful for simplification, neglecting details that can be
considered in a second step, without losing touch with reality. In ABM one
studies a ‘behavioural phenomenology’ observable in the real world, to construct
virtual agents that simulate the behaviour of real agents by means of appropriate
algorithms.
Agent-based models are particularly suited for the study of complex systems
because they allow one to managing agents’ that realise network formation and
interaction.
Nevertheless, there are lights and shadows. Although the ABM approach is
promising, there are elements of concern. Agent-Based Modelling still lacks
a sufficiently structured theory, since it is at a level of maturity not yet compar-
able with that of the mainstream, at least to the extent of considering ABM not
just an approach or a technique but a discipline as well as econometrics that can
be applied in almost every field of science. In ABM there is no shortage of

methods of implementation, results, solutions, developments and contributions

in a wide spectrum of research fields, and they are still growing, but this happens
without ‘coordination’. Also, the present Element will be useful for novices,
who will appreciate a survey of application platforms.
Section 1 is devoted to modelling through ABM methodology. Agent-Based
Modelling is an indispensable tool to be able to analyse complex systems, as
well as a laboratory for the economist, dealing with the construction of ABM
models, their theoretical conditions, and their empirical validity. We first intro-
duce the notion of agent in Section 1.1. Section 1.2 considers heterogeneity and
network interaction, which can be understood as the main determinants of
complexity one can easily manage with ABM simulation. After having intro-
duced these fundamental aspects, Section 1.3 introduces a short description of
ABM as a methodology for modelling and Section 1.4 offers a short history of
the method. Section 2 is concerned with tools and notions of ABM. In
Section 2.1 we introduce notions about the tools in ABM simulation such as
the mostly diffused platforms, and in Section 2.2 a guide to the literature about
ABM tools is discussed. All the previous elements prepare the field for
Section 2.3 that develops the general characteristics of an ABM before passing
to the fundamental aspects of validation and sensitivity analysis in Sections 2.4
and 2.5 respectively. Section 3 concludes the Element.
G.G., M.G., S.L.

1 Agent-Based Modelling
Agent-based models potentially present a way to model the [. . .] economy as a complex
system, as Keynes attempted to do, while taking human adaptation and learning into
account, as Lucas advocated. Such models allow for the creation of a kind of virtual
universe in which many players can act in complex – and realistic – ways.
J. Doyne Farmer and Duncan Foley, ‘The economy needs agent-based modelling’.

Agent-Based Modelling is a computational approach for the study of systems

with heterogeneous and interacting agents. The behavioural rules of artiﬁcial
agents are simpler than those activated by the real agents; as can be observed
from the composition of their micro-behaviours, these systems follow emergent
dynamics that we would not have been able to understand just by considering
the behaviour of the individuals. By aggregating the results we can make
inferences about system-level regularities, and we can explain why some are
more persistent than others. This has two implications: (i) empirical regularities
(not universal laws) are a priori unknown, and (ii) they are not attributable to
individual behaviour but are proper to the hierarchies of the system. In almost
all ABMS we ﬁnd one or more species of agents with characteristic properties,

both related to their endowments and to their ways of acting and interacting,
very often only in a local network. Moreover, artiﬁcial agents have the possi-
bility of changing their behaviours by choosing among a set of rules of action, as
if trying to adapt to changes in the context.

1.1 The Agent

There is no single definition of ‘agent’ in the literature. The agents of an ABM
(socioeconomic) are decision-making machines that emulate the behaviour of the
individuals of the system. They receive information from outside (e.g., from the
market or from other agents) that they then manage, store in memory, and process
through algorithms emulating the behavioural processes of real agents. As
a decision-making machine encoded in a computer program, the agent of an
ABM is subject to the efficiency of the software and the power of the hardware
and is ‘built’ by the programmer who decodes the capacity of action in an artificial
world.
To the best of our knowledge, Holland and Miller (1991) were the first to
introduce the term ‘agent’: ‘An agent in such a [complex adaptive] system is
adaptive if it satisfies an additional pair of criteria: the actions of the agent in its
environment can be assigned a value (performance, utility, payoff, fitness, or the
like); and the agent behaves so as to increase this value over time.’ Tesfatsion (2021)
claims:

The term Agent-Based Modeling refers to a class of modelling approaches

designed for the study of systems whose dynamics are driven by successive
interactions among heterogeneous entities. Such systems range from the
particle systems studied in physics to the coupled human and natural systems
studied in socioecology. [Agents are conceived] in broad terms, as software
entities able to represent individuals, social groupings, institutions, biological
entities, and/or physical entities. . . . Given initial modeler-speciﬁed agent
states, all world events arise entirely from agent interactions. (Box 1)

In general, an agent is any entity capable of acting, namely, of performing

sophisticated actions, from the mere reaction to some stimulus up to the highest
level of proactivity. The spectrum of possibilities is very wide, as is the range of
entities that perform actions.
As the agents of the real world are heterogeneous, so also are those of the
artiﬁcial world of an ABM. Heterogeneity can be deﬁned in at least two ways. On
the one hand, we can consider ‘structural’ heterogeneity, which concerns the
internal state of the agent’s equipment, and on the other, ‘behavioural’ heterogen-
eity, which concerns the way of action. This last aspect brings us to the topic of
interaction with other agents or the environment, in both direct and indirect ways.

BOX 1 THE C-ABM THEORETICAL FRAMEWORK OF TESFATSION (2021).

Agent-Based Modelling is a class of modelling approaches for the study of
systems whose dynamics are determined by repeated interactions among
heterogeneous agents. Agent-based Computational Economics (ACE) is
a variant of ABM, identified by Tesfatsion in 1996, in which the agent is
understood as active software in an artificially constructed world, acting as
a function of its state – described by data, properties, and methods or func-
tions – by which individual and collective entities are represented, from whose
interaction the events of the artificial world are generated. Tesfatsion (2021)
proposes the c-ABM variant, where ‘c’ means ‘complete’ because it is based
on seven fundamental principles that (i) describe a computationally based
general approach, from which logical rigour is derived, and (ii) allow a high
degree of flexibility. The c-ABM principles are ‘methodological axioms’ for
defining a core set of arguments on which to develop a general theory of ABM.
The first six principles concern the characterisation of a system
described by a model, in ‘initial-value state-space form’. This model
evolves in the successive iterations of a computer execution, indexing
the various events along a schedule that starts from an ‘initial instant’ and
ends at a ‘final deadline’, and that fulfils given boundary conditions,
established as constraints, specified to determine the initial condition.
The first principle concerns the definition of an agent as a software, an
abstraction of a real entity, which lives in an artificially constructed world and
whose ability to act depends on its state (data) and methods (functions).
The second principle concerns entities, individual or collective, that are
representable with the generic notion of an agent. The third principle concerns
local constructiveness, understood as the ability of an agent to act at each
instant by means of a function of its state at each iteration. The fourth principle
concerns the autonomy of the agent, which acts without any coordination from
outside but, at most, under the restrictions that characterise it by qualifying its
behaviour. The fifth principle concerns the constructiveness of the system, that
is, the fact that the state of a computationally constructed system depends only
on the set of actions of its constituents at each iteration. The sixth principle
concerns the historicity of the system, that is the fact that, once the initial
conditions are fixed, the changes of state of the agents and of the system are
determined by the events that are realised through the interactions among the
agents. The seventh principle is completely different from the others because it
places limits on the researchers, who must limit themself to specifying the
initial configuration, leaving the system to evolve to analyse the results without
intervening with an observation that could disturb the evolution of the system.

Based on these founding principles, an ABM becomes a computational

laboratory for exploring an artificially constructed world. If the model refers
to a real system or phenomenon, then it is through the c-ABM that
a computational simulation paradigm can be introduced. An approach that
is as flexible as it is logically rigorous for simulating the ‘world as it is’,
obviously accepting some simplifications depending on the purpose, rather
than the computational reduction of the ‘world as we would like it to be’ or
the representation of a conceptual experiment by a ‘toy model’. Based on the
flexibility and logical rigor of c-ABM, the computational method of simula-
tion can be said to be the ‘mathematics for the analysis of the real world’ in
a realistic way, not just verisimilitude, which surpasses the traditional formal-
istic modelling in a way that is closer to the ‘reasoning of mathematics’, that is
to say, detached from the real world it wants to describe.

As we will see, it is through interaction that the agent becomes a ‘social’ entity
open to the outside world. Moreover, as the economic agent can behave as it
considers more opportune in relation to its own rules of behaviour, that is, it is free
to follow its own will, so also the artiﬁcial agent of an ABM can be constructed in
such a way as to be able to choose how to behave when the context changes.1
The agent is therefore capable of adapting to the changing state of its environ-
ment and learning from its own or others’ experience. To be able to learn, the
agent must have memory and sociality. Sociality means that the agents make
a community and interact, sometimes competitively, and exchange information
and can change their behavioural rules.
The analogy between the notion of an agent and the human individual obvi-
ously is incomplete. Among many other features overlooked here, it is worth
mentioning that some properties are exclusively human, and therefore (almost)
impossible to be trained in an agent of a model; for example, the human capacity
of abstract thinking, of posing new problems in an autonomous way, and of
feeling and emotions. The human being is certainly rational, but rationality does
not consist in ﬁnding the optimal solution according to some calculation
scheme. Rationality is reasonableness, that is the ability to do the best we
can, even while giving up the theoretical optimum. The information available

1
In agent simulation, it is possible to construct agents who conceal important information from
others, attempt to extract conﬁdential information from others, or mislead them to act to their
advantage. The so-called belief-desire-intention (BDI) scheme, inspired by Bratman’s (1987)
theory of practical reasoning, allows us to describe the mechanism by which the agent separates
the planning phase of its actions from the implementation, and allows us also to treat agents with
limited rationality.

is not only limited and unequally distributed, but each agent is endowed with
bounded rationality.2 The fact that an entity is endowed with limited rational-
ity means that its decision-making capabilities are limited even in the presence
of full information. It is with these resources that the agent faces any decision-
making problem. Consequently, the optimality of the solution to the agent’s
decision problem can at most be posed in terms of a relative or local optimum,
not an absolute or global optimum.
The arguments discussed so far sketch the notion of an agent based on
a ‘behavioural phenomenology’ observable in the real world. With these charac-
teristics in mind, we now consider how we can construct a virtual agent that
simulates a real agent. Initially, we can design the agent as an algorithm. An agent
of an ABM model is a software that considers at least two of the discussed
features: structural heterogeneity, which refers to the variables (or data) that
describe its internal state and endowments, and behavioural heterogeneity,
which refers to the decision and behaviour rules (or functions), and thus also
refers to the interaction with the outside world.

1.2 Interaction, Networks, and Heterogeneity

Interaction is a particular type of action that occurs between at least two entities.
For an interaction to be realised, it is necessary that at least one of the two entities is
equipped with an interface with which to recognise its counterpart to communicate
information, understood in the most general sense proposed by Rosen (1986): ‘In
human terms, information is easy to deﬁne: it is anything that is or can be answered
to a question’ (p. 3). Starting from this simple deﬁnition we can identify at least two
categories of interaction, the direct and the indirect one.3
Interaction is direct when the interfaces of two individual interacting
entities allow ‘one-to-one’ reciprocal action, that is, when one counterpart can
communicate a request to the other and the latter is able to communicate its

2
The notion of ‘bounded rationality’ is attributed to Herbert Simon (1957).
3
In terms of direct interaction, this can be local, if everyone communicates only with a small group
of counterparts, or global, if everyone communicates with everyone in the system. Local or
global, depending on the purpose, direct interaction can be voluntary – the individual chooses his
counterparts – or induced – the individual has no choice but to communicate only with given
counterparts. If the association between counterparts is governed by choice criteria, typically
based on expectations about the successful outcome of their encounter, the interaction is said to be
stochastic, that is, the interaction is interpretable as an event. The simplest, and most particular,
case of stochastic interaction is when individuals meet by chance, which is tractable with
a random communication framework (Kirman, 1983) or with ‘random matching’ procedures
(Ioannides, 1990; Bak et al., 1996). If the interacting individuals do not choose their counterparts,
nor do they meet them randomly, then the interaction is induced and thus we speak of determinis-
tic interaction, that is, conveyed by a predetermined relational infrastructure.

response to the former. In all this what matters is that one speaks to the other and
that the speech is exclusive to each other, not to multiple different entities.
Interaction is an event, situated in space and time, that occurs as a reciprocal
action between entities enabled to communicate by their interfaces. The spatio-
temporal situation concerns the historicity of their relationships. That is, the two
agents may already be related for reasons other than those for which they now
interact, or it is precisely for interacting that they now establish a new relationship.
In fact, at the basis of interaction there is ‘sociality’, namely, connectivity (Casti,
1979) understood as belonging to a network structure (also multi-level) in which the
nodes represent the agents and the links represent the connections that support the
interactions.4 The network that supports the interaction is a relational infrastructure
in which two agents can recognise each other and decide whether to communicate
or not. The spatio-temporal situation is therefore defined by a relational infrastruc-
ture that can be a network in which the relationships among the nodes already exist,
but then the relationships are activated or deactivated in the time, or where the
number of nodes varies in the time and, with it, also the valence of the ties.
Each network as relational infrastructure that supports interaction can be
associated with a graph, where nodes/agents can be connected by oriented
links, that is, with an arrow uniquely oriented from A to B or from B to A, or
by simple links, that is, with a segment doubly oriented from A to B and also from
B to A. In the first case the matrix that represents the connections is said to be of
incidence, and in the second case the matrix that represents the connections is said
to be of adjacency: the last one is necessarily symmetrical, while the other may not
be. In both cases, the existence of the relationship can be indicated with the value 1,
while 0 indicates the absence of the relationship. That is, if, at the intersection of
the row of node A and the column of node B, 1 is written, then A and B interact,
and vice versa. Sometimes, instead of binary values, you can use ‘weighted’ values
that express the intensity of the relationships and are represented on the graph with
more or less marked traits depending on the intensity. A network as a relational
infrastructure can change in time – both with respect to the links that turn on (1) or
turn off (0) and with respect to the number of nodes that compose the oriented or
simple graph – depending on the state and behaviour of the agents.
Indirect interaction also admits a graphical representation. For example, firms
and consumers can be indirectly related by the fact of being customers of the same
bank, even if none of the consumers either works for any of these firms or is in any
way a customer of it: what agglomerates these agents into a network, typically
star-shaped, is only the fact of being customers of a bank. A bit more sophisticated

4
For an introduction to network theory and practice see, among others, Wasserman and Faust (2008),
Scott and Carrington (2011), Caldarelli and Catanzaro (2012), and Knoke and Yang (2019).

and factually real is the following example. Suppose that the members a group of
consumers are all customers of bank A (A-consumers) and a group of firms are all
customers of bank B (B-firms), and that A and B in turn interact in the interbank
market. The A-consumers and the B-firms are related and interact indirectly to the
extent that the behaviours of the A-consumers and the B-firms change the type of
relationship between A and B, such that A changes its relationships with its
A-consumers and B changes its relationships with its B-firms. In this case the
overall graph is composed of two stars connected by a bridge between A and
B. The topology is further complicated if some A-consumers are customers of
some B-firms and if some B-firms have hired some A-consumers. In this case the
stars are melded into one single network that is said to be bipartite.5 On the first
level we place A and B between them, and on the second level we place all
A-consumers connecting them to each other and to A and all B-firms connecting
them to each other and to B, but then we also draw arcs between the subset C(A|B)
of A-consumers buying from B and the subset F(B|A) of B-firms that have hired
A-consumers. Also, the bipartite network can change through time.
In fact, a network as a relational infrastructure that supports interactions is an
emergent phenomenon of the system, due to the interactive behaviour of agents of
various species. Note that a network can also exist between agents of the same type,
at most heterogeneous with respect to their endowments – structural heterogeneity –
while it is not necessary that they are heterogeneous also with respect to their
behaviours – behavioural heterogeneity – or to their species. However, as men-
tioned earlier, heterogeneity and interaction are coupled categories of complexity
(Landini and Gallegati, 2014). If we interact in order to acquire information, as
stated earlier according to Rosen (1986), and information is typically asymmetric
and incomplete, it is also true that interaction can both contribute to diffuse part of
the information but also create new asymmetries, hence a new need to interact and
so on. So, in fact, what mainly counts in characterising a system as complex is the
interaction that is part of the behavioural heterogeneity of the agents. On the other
hand, although animated by the same goal, even if initially homogeneous in their
endowments, agents can interact in different ways, for example by cooperating or
competing. When we deal with complex human systems, we analyse relational
networks. These support the interactive behaviours from which phenomena emerge
that are proper to the system, and the same network is a representation of the
system and not of the single individuals that compose it. From a complex
system emerges a complex network (Reichardt, 2009; Caldarelli, 2010;

5
A bipartite network is a network in which there are at least two disjoint groups of nodes in which some
nodes of the ﬁrst group, which can be among them in relation also for the simple belonging to the
group, connect to some nodes of the second group, which can be among them in relation also for the
simple belonging to the group. The two groups of nodes can be graphically represented on two levels.

Caldarelli and Chesa, 2016) evolving, changing, and reconﬁguring. In con-

clusion, one way to model interaction is to ground it in the notion of commu-
nication between agents and, therefore, to situate it in space and time with
networks. In an economic system, social agents are interconnected by many
kinds of relationships that determine different networks, and the state of each
depends directly or indirectly on that of many others.
An economy is therefore an interactive system of heterogeneous agents. Among
the various behaviours of a social agent there is also the interactive one; in fact it is
precisely because of its ability to interact that an agent can be called ‘social’, and this
is true both for agents who choose their counterparts and for those who are placed in
interaction (Kirman, 1983; Kirman et al., 1986; Kirman, 1999). The heterogeneity of
agents with respect to their states, which are also influenced by the states of other
agents, and their behaviours, among which the interactive one is the most relevant,
make an economy a complex system. Heterogeneity and interaction are not separ-
able but, rather, they are two sides of the same coin, which we call ‘sociality’, from
which the complexity of the system originates (Landini and Gallegati, 2014), in
which interactions are conveyed by networks of relationships. That is, identical
interacting agents become different (in states and behaviors) and different agents are
stimulated to interact. Bookstaber and Kirman (2018; p. 770) explain that, as much
as it is not essential for the system to be initially heterogeneous in order to be
complex: ‘Heterogeneity almost inevitably leads the economy to be a complex
adaptive system . . . A collection of particles individuals who are, at the outset,
identical, may change their state as they interact with other particles and the result
will be configurations of particles in different states which will be difficult or even
impossible to predict from an analysis of the particles in isolation.’ In short,
heterogeneity and interaction are ‘entangled’ categories of complexity because
identical interacting agents become different and different agents are induced to
interact, that is, interaction generates heterogeneity and heterogeneity leads to
interaction.

1.3 What ABM Is About

Agent-based modelling is a computational simulation method that implements
a program executable by a computer according to a model, a simpliﬁed and
somehow formalised representation of ‘something’ that exists in the real world,
based on the agent, that we may initially intend as any entity capable of acting.
The ABM methodology is adopted by many disciplines and the number of
contributions that use it is growing rapidly, both because of the increasing diffusion
of computers and ‘low-cost’ programming languages and because simulation is
often the only way to study complexity, or those phenomena that cannot be

experimentally replicated (in economics as in astronomy or volcanology). Given the

modest empirical success of mainstream economics, high hopes are placed in ABM
(LeBaron and Tesfatsion, 2008; Farmer and Foley, 2009; Borrill and Tesfatsion,
2010; and Bookstaber, 2017). However, despite its growing popularity, at present
users of ABM are not yet fully satisfied with its results (Axtell and Farmer, 2023).
Leombruni et al. (2006) propose a set of best practices for doing ABM simula-
tion in socioeconomic disciplines. Their proposal follows from highlighting the
main limitations of this approach, at least in its current state of development. In
particular, the contribution of these scholars is important because they describe
some of the weaknesses of this approach that motivate the traditional modeler to
look at ABM with scepticism. A reason for dissatisfaction with the ABM approach,
sometimes even on the part of those who adopt it and contribute to its development,
and which leaves those who do not adopt it perplexed, is that at present there is no
sufficiently structured formal theory so general that ABM can be made a discipline,
which can be applied to specify any agent model in any field of research. To put it
bluntly, just as econometrics is a discipline that can be applied to any context in
which we have cross-sectional and/or time-dependent data, ABM is still far from
achieving a similar level of generalisation insofar as it can be applied to a wide
range of phenomena in almost any discipline, but this is done in a loosely organised
way. Nevertheless, some breakthroughs are being made. For example, North (2014)
proposes a ‘theoretical formalism for analysing agent-based models’, while
Tesfatsion (2021) proposes a theorisation (Box 1) starting with the idea of an
agent as a ‘software entity within a computationally-constructed world, able to
act within this world on the basis of its own state (data, attributes, and/or methods)’.
In addition, there is no shortage of undergraduate courses on ABM and we
have some important texts for computational analysis in various disciplines,6
but there is no ‘general purpose’ manual, so to speak, and we think this is due to
the lack of a general formal theory. At the same time there are different environ-
ments for the development of agent modelling (Section 2.1): while this is a source
of inexhaustible richness for the development of ABM as a discipline, it can also
generate some bewilderment.
For a better understanding of some of the reasons for this dissatisfaction it is also
important to make a distinction between the concepts of ‘simulation’ and ‘compu-
tation’, often considered as synonyms. Greenblat (1971) claims that:

A simulation is an ‘operating model’ of central features or elements of a real or

proposed system, process, or environment. . . . it is not the entire system that is

6
Among a wider list of books, we recommend Billari et al. (2006), Tesfatsion and Judd (2006),
Wilensky and Rand (2015), Hamill and Gilbert (2016), Ciofﬁ-Revilla (2017), and Railsback and
Grimm (2019).

modeled or represented, but only selected features. What is important is that the
model ‘behaves’ like the referent system . . . for what is essential is that
a simulation is a ‘dynamic’ model. As changes take place in the referent system,
they likewise take place in the model; functional as well as structural relation-
ships in the simulation are isomorphic with those of the referent system. (p. 161)

Both the simulation and the computation are based on the execution of a model by
means of a suitably instructed calculator but, differently from the simulation, the
computation does not need a model which is a formalised representation of a real
fact. These computational experiments return results, but of little practical value;
however, they are not entirely without value from an analytical and methodological
perspective. For example, the Shelling model of social segregation or Conway’s
Game of Life are computational experiments, and it is on this basis that Epstein and
Axtell’s (1996) Sugarscape model was developed. Similarly, it is from ‘toy models’
of the economy that actual simulation experiments were then developed, such as the
CATS model (Delli Gatti et al., 2011), the EURACE models (Cincotti et al., 2010;
Dawid et al., 2018) and, more recently, the CAN-ABM (Next-Generation Agent-
Based Model of Canada) model of Hommes et al. (2021) and the model of Poledna
et al. (2020) for predicting the macroeconomic effects of the COVID-related
lockdown in Austria.
Mainstream economics remains sceptical because it sees ABMS as black boxes
with too many degrees of freedom that would allow anything to be supported. Our
position, on the other hand, is that such models are fully transparent and micro-
founded by construction, the assumptions are explicit and so are the equations that
implement them. From a theoretical point of view, there is all the potential needed to
overcome the limitations of the mainstream method and orient research towards the
Economics of Complexity, and from an applicative point of view we have formal
bases, even if not yet consolidated and shared, that allow us to propose ABM as
a reference methodology even though validation is in the making, as we shall see in
Section 2.3.

1.4 Some History

The origins of agent modelling are often traced back to Orcutt’s 1957 work on
microsimulation (Ballot et al., 2015). This work aims to understand the economic
consequences of welfare and redistributive policies. In Orcutt’s model there are
many heterogeneous agents interacting without centralised guidance, the simulation
results can be computed numerically, and the system is dynamic and recursive. But
the absence of a market is a major limitation to the completeness of the model. Two
economists tried to remedy this simultaneously, with consistent stock ﬂow models
that place great emphasis on the initialisation and calibration process. Bergmann
(1974) published the TRANSACTIONS model, capable of generating aggregate

macroeconomic outcomes. Eliasson in 1977 and 1984, constructed MOSES,

a model of the Swedish economy. This is a forerunner of many ABM models,
inspired by Schumpeter – innovations and business demography; Keynes – relations
between demand for goods and consumer-labour income; and Wicksell – adaptive
expectations and limited rationality of agents. It lays the foundation on which later
ABMS will build their elaborations.
Turrell (2013, p. 175) reminds us that the ﬁrst model with agents, although
not according to the current view, was developed by Enrico Fermi in the 1930s.

The initial spur for developing agent-based models came in the 1930s when
physicist Enrico Fermi was trying to solve problems involving the transport
of neutrons, a sub-atomic particle, through matter. Neutron transport was
difficult to model as each step in a neutron’s journey is probabilistic: there is
a chance the particle will directly interact with, scatter off, or pass-by other
particles. Previous methods had tried to capture the aggregate behaviour of all
the neutrons at once, but the immense number of different possibilities for
neutron paths through matter made the problem very challenging.
Fermi developed a new method to solve these problems in which he treated the
neutrons individually, using a mechanical adding machine to perform the compu-
tations for each individual neutron in turn. The technique involved generating
random numbers and comparing them to the probabilities derived from theory. If
the probability of a neutron colliding were 0.8, and he generated a random number
smaller than 0.8, he allowed a ‘simulated’ neutron to collide. Similar techniques
were used to find the outgoing direction of the neutron after the collision. By doing
this repeatedly, and for a large number of simulated neutrons, Fermi could build
up a picture of the real way that neutrons would pass through matter. Fermi took
great delight in astonishing his colleagues with the accuracy of his predictions
without, initially, revealing his trick of treating the neutrons like agents.
The agent-based techniques Fermi and colleagues developed went on to play
an important role in the development of nuclear weapons and nuclear power. At
around the same time that Fermi was developing his technique, the first electronic
computers were becoming available at the world’s leading scientific institutions.
Computing power remains key to agent-based modelling today, with some of the
world’s supercomputers being harnessed for ever more detailed simulations.
By 1947 scientists had developed a name for this technique which reflected its
probabilistic nature: the Monte Carlo method. The story goes that the name was
inspired by Stanislaw Ulam’s uncle, who would often ask to borrow money by
saying he ‘just had to go to Monte Carlo’. In 1949, Metropolis and Ulam
published a paper together entitled ‘The Monte Carlo Method’ which explained
the many uses of the new technique of using random numbers to tackle problems.
Not all of these were agent-based models but all relied on using artificially
generated random numbers to solve problems. This more general Monte Carlo
technique has been applied very widely, for instance to calculating solutions to
equations with many parameters, to the management of risk and catastrophes, and
to investments in finance.

The more general Monte Carlo method has the strength that it can very
efﬁciently explore a large number of possibilities. For instance, the usual way
for Fermi’s neutron problem to have been treated would have been to create a grid
of every single possibility and then ﬁll in what happens for each of them. This
means that even implausibly unlikely scenarios are computed. Monte Carlo
instead focuses on the most likely outcomes. This property can make the differ-
ence to whether a particular problem is solvable or not. The Monte Carlo method
can also deal with distributions, for instance across income, which are not
described by a normal distribution.

The simulation to which Fermi refers is closer to the so-called Monte Carlo
method than to the ABM methodology.
Von Neumann proposed a theoretical machine capable of reproducing itself,
which is often remembered as the first example of a computational agent model.
The Polish mathematician suggested that the machine was described by a set of
cells on a grid, and based on this intuition (von Neumann, 1951) created what later
literature would call ‘cellular automata’. Another step forward is Conway’s Game
of Life (Gardner, 1970), which operates with simple rules of interaction between
agents that are identical except for their geographical location on a two-
dimensional chessboard. Conway can show that, depending on various initial
conditions, ‘regular’ aggregate structures emerge. One of the first models based
on interacting heterogeneous agents was Thomas Schelling’s (1971) segregation
model that produces an aggregate emergent result starting from individual dis-
order. In Figure 1 a simulation result of Schelling’s model is represented. Agents
are initially placed on a physical grid at random: 10 per cent of the cells are
maintained empty while the remaining 90 per cent of the cells are occupied by blue
and red agents in equal shares. The main behaviour is that each individual likes
living close to a given share of agents of the same colour, say 25 per cent. At any
iteration agents seek similar agents, and all of them move until this fraction is
satisfied for everyone: there is no guarantee that the simulation ends. If the
simulation ends, take this as an initial condition, increase the similarity required,
say up to 50 per cent, and run the model again. If this second simulation ends, that
is, the share is reached for every agent, some segregation is observable. Assume
this as an initial condition, increase the similarity up to 75 per cent, and run the
model again: if it ends, the artificial society appears more segregated.
A decade later, Robert Axelrod (1997) presented a model in the form of
a tournament of strategies of the prisoner’s dilemma to determine a winner. It
was Craig Reynolds (1987) who developed some of the first models based on
biological agents – later known as artificial life – that contain social features,
while a pioneering ABM paper was by Kim and Markowitz (1989) and the
follow-up research by Jacobs et al. (2004).

Figure 1 A simulation result of Schelling’s model.

Parameters: Red/Blue 45%/45%; Empty 10%; Size 50×50; Delay 100 ms.
Simulations retrieved from http://nifty.stanford.edu/2014/mccown-schelling-
model-segregation/.

For a short history of Agent-Based Computational Economics (ACE) see

Tasfatsion (2021). As a variant of ABM, the c-ABM (Box 1) finds ACE as its
own special case because it is a method of modelling the real world according to
the principles of c-ABM. An ACE model is an ‘initial-value state-space model-
ing of an economic system’ (Tesfatsion, 2021) because it fulfils the principles of
c-ABM and does not involve schemes of rationality, optimality and equilibrium
that depend on the ideas of the researcher, but consists only of ‘logically
contructive autonomous agents interacting within a modeled system satisfying
system constructivity and system historicity’.
The last decade of the last century saw the expansion of ABM within the social
sciences with the ‘Sugarscape model’ of Joshua M. Epstein and Robert Axtell
(1996) and especially the spread of the Santa Fe Institute approach that became
popular from the 1980s onwards under the influence of research on complex
adaptive systems (CAS) modelling. This research adopts a transdisciplinary
focus on the general phenomenology of complex adaptive systems in biology,
economics, technology, and society. If up to this point the history of ABMS is

primarily a US story, in 1999 Nigel Gilbert and Klaus Troitzsch published their
book Simulation for the Social Scientist (Gilbert and Troitzsch, 1999) and founded
the Journal of Artiﬁcial Societies and Social Simulation (JASSS). Shortly before
this, the international Workshop on Economics with Heterogeneous Interacting
Agents (WEHIA) was organised in Ancona in 1996 (Gallegati and Kirman, 2019).
Beyond this, the reading proposed by Squazzoni (2010; p. 200) seems
convincing to us. According to Squazzoni while the interdisciplinary Santa Fe
Institute (SFI) approach dominates in the US:

in Europe, it has been metabolized prima facie by some innovative social

scientists working within and to some extent between their own disciplines,
who saw it as ‘the’ social science modelling technique par excellence that,
once applied to traditional scientiﬁc questions, would strengthen the explana-
tory power of the social sciences and improve them from within.

Currently, ABM methodology is increasingly successful also in economics:

a scientiﬁc society (ESHIA, Economic Sciences with Heterogeneous
Interacting Agents), a dedicated journal (JEIC, Journal of Economic Interaction
and Co-ordination), books (Delli Gatti et al., 2018; Handbook of Computational
Economics, in four vols., 1996, 2006, 2014, 2018, Elsevier; while Cambridge
University Press publishes a series of Elements devoted to Complexity and ABM,
one of which you are reading), an internationally relevant PhD school at
Sant’Anna in Pisa, conferences (WEHIA), research centres (Cattolica in Milan,
Oxford, Vienna and many others) and papers in top 50 journals, which have
quadrupled in the last 10 years. Moreover, Andrew Sheng reminds us, in an
interview with Project Sindacate on 24 March 2020, that

the agent-based models China is using now are multidisciplinary, multilevel

models – what nuclear physicist Qian Xuesen has called ‘giant open complex
system’ models. They remain crude, but with sufﬁcient data and appropriate
artiﬁcial intelligence tools – which China is collecting and developing,
respectively – one can look for ‘knowable unknowns’ and provide better
options.

In Italy, at least four universities have developed ABM themes: Genoa with
EURACE, a large Stock-Flow Consistent (SFC) model with European data
(Cincotti et al., 2010, 2012); the Cattolica University in Milan with CATS that
integrates ﬁnance with production (Delli Gatti et al., 2005, 2011) and now
proposes ‘hybrid’ models (Assenza et al., 2013, 2015); the Sant’Anna in Pisa
with the K+S (Keynes+Schumpeter) model (Dosi et al., 2010, 2013), where the
introduction and diffusion of innovations and their effects on the structure of the
economy are masterfully modelled and heterogeneous capital goods adequately
considered, and has produced many other works where great attention is

devoted to networks, policy and empirical veriﬁcation;7 and ﬁnally Ancona,

where a number of researchers have contributed to produce the CATS, the
‘ABModellaccio’ (Caiani et al., 2016; Caiani and Caverzasi, 2017) and the
‘Modellone’ (Riccetti et al., 2015; Russo et al., 2016).

2 Tools for the Simulation with Models Based on Agents

For the simulation of agent-based models (ABMS) there are two possibilities. The
ﬁrst one is that one writes a program with some programming language so as to
construct all the necessary components, that is, the implementation of the agents
specifying the property (data and behaviors); the interface with which the observer
(researcher) interacts with the model in order to set the parameters, to import data
(if necessary) and to export the results; and the interface with which to proceed to
the statistical analysis of the results and to visualise them. This solution is the
‘freest’ one because it allows a high degree of customisation, especially if
a ‘general purpose language’ is chosen, and it allows one to treat agents with
a high degree of autonomy, very close to the notion of real agent as far as the
structure of their state and behaviours are concerned. However, this is also the
most difﬁcult way, especially if you do not have computer science and program-
ming skills, typically according to the OOP (Object-Oriented Programming)
paradigm. Usually, you just write a program to implement the agents and let
them act, after setting some parameters, while the study of the results is conducted
with other tools after exporting them in some format. A similar, but in fact
different, solution is to use Computational Mathematics Systems, such as
Mathematica or MATLAB,8 which are integrated development environments
for numerical computation and graphical representation (Macal, 2004).
The other, more common, option is to adopt a dedicated ABMS platform. In
general, the ideal simulation system should provide the following features:

• minimal learning effort to use,

• maximum ﬂexibility to build simulation models,
• as much standardisation as possible,
• stable but continuously developing libraries and packages,

7
The K+S model can replicate the stylised facts of system behaviour at multiple levels (micro,
meso and macro; Delli Gatti et al., 2007). Since ABM models are multi-level, consistency
between empirical evidence and theoretical prescriptions is crucial. The ‘principle of unreality’
that Simon (1963) attributes to Friedman (1953), namely, that a model might be useful at the
aggregate level while being wrong at the level of the agents, does not apply.
8
Mathematica is a registered trademark of Wolfram Research Inc., www.wolfram.com. Some
examples of ABMS with Mathematica are available in the site https://demonstrations.wolfram
.com/topic.html?limit=20&topic=Multi-agent+Modeling. See also https://library.wolfram.com/
infocenter/Conferences/5767/#downloads. MATLAB is a registered trademark of The
MathWorks Inc., www.mathworks.com.

• the most agile user interaction,

• analysis tools, including visual ones, and
• maximum portability on different machines and operating systems (Abar
et al., 2017).

Currently, no single platform meets all these requirements at the highest level. If
several programming languages are available, some at no or low cost, then far more
platforms are available for the ABMS. The solution of adopting a platform greatly
simplifies the work but imposes a difficult choice even before starting it. In fact, there
is no best platform, but it is possible to find the most suitable one according to our
goals. The choice depends on various factors. Some factors are, so to speak,
exogenous to the project. For example, if it seems that platform X is better than
platform Y for some reason, we must also consider whether and which of the two is
distributed under a commercial license, which implies costs, rather than open-
source, whether it is freeware or shareware, and for what purposes the software
we are going to produce is allowed and its possibility of distribution. This first aspect
is important but not the most difficult to address. In fact, since there is no best
platform, we must immediately keep in mind what is the purpose for which we
implement the model and its structure. That is, the scale, understood as the number of
agents we want to implement, the variety of agent species that populate the ecology
of the model, the degree of complexity of the agents, and the modelling of the
environment itself. Moreover, we must also consider that some platforms are
maintained, with continuous evolutions and developments, as the computer science
and the calculators evolve, while others are never updated and, therefore, they can
become obsolete or unusable on recent computers.
The typical elements one needs in ABMS are:

• a tool for implementing agents and building the environment in which they
operate,
• an event generation tool,
• a tool for setting parameters – or importing data if needed – and
• a tool for analysing and visualising results.

With few exceptions, almost all available platforms meet these requirements.
All platforms are based on a programming language, which facilitates code
control, reuse, and distribution. Almost all ABMS platforms owe a debt to the
progenitor, the Swarm platform built by Langton for the simulation of artiﬁcial
life as a complement to traditional biology (Langton, 1995).
An ABMS platform is therefore a computational environment, based on
a programming language, with which it is possible to encode a model written
‘pen and paper’ in a computer-executable program to study some phenomenon

or the dynamics of a system, without having to deal too much with the computer
aspects, that is having few or no programming skills.

2.1 Some of the Mostly Diﬀused ABMS Platforms

With the growing interest in ABMS in all areas of research, there has been
a proliferation of programming languages and dedicated platforms. Some are
more suitable for building prototype models, simple, even educational, low-cost
and distributable without too many constraints, frequently referred to as ‘toy
models’. These platforms aim at the immediate use of the model with low software
learning costs, but this advantage is paid in terms of model scalability and low
execution efficiency. Others are instead more appropriate for developing applied
research models, sometimes quite complex, that require great computing power and
speed, sometimes imply costs, and pose restrictions for distribution, especially for
commercial purposes. Choosing which platform to adopt also is relevant, because
some limitations in model development and future revisions or extensions may
depend on this choice. Currently, we have many review articles in the literature
regarding operational tools for the ABMS and this section does not aspire to be
added to the list. The purpose here is instead to provide a bibliographic base for
further study and briefly present some of the most used platforms such as Swarm,
Repast, Mason, NetLogo and EcoLab; for the many others that we do not mention
here, we refer to the literature that we will discuss.
There is common agreement in the ABMS user community that Swarm
(Minar et al., 1996) is the progenitor of all dedicated platforms.9 Swarm was
conceived in the mid-1990s by Christopher Langton to implement a model
without having to deal with computer science, namely, without having to set up
calculation tools, parameters management, agent initialisation, analysis, and
visualisation. Everything had to be integrated in a single environment so that
one could focus only on the model. The first versions were based on procedural
programming languages such as C and FORTRAN, but those were also the
times when the OOP paradigm was starting to spread, so the development of
Swarm proceeded in Objective-C and C++.10 At present Swarm includes three
components: ModelSwarm is the computational implementation tool for the
model, ObserverSwarm is the tool with which the researcher can analyse and
visualise the results, and BatchSwarm is the tool to store and investigate results,
data, and parameters. There is also a Java-Swarm version, but it is less wide-
spread than other platforms that are based on the Java language natively.11 In

9
www.swarm.org.
10
https://en.wikipedia.org/wiki/Objective-C; https://en.wikipedia.org/wiki/C%2B%2B.
11
https://en.wikipedia.org/wiki/Java_(programming_language).

various ways, all platforms inherit from Swarm part of the basic philosophy and
several tools, even if they are developed with different languages. For example,
after Swarm many implement a ‘discrete event scheduler’, which allows agents
to trigger their behaviours at given times, and the ability to implement a physical
space, mapping it to a 2D grid, on which to place agents. A recent development
of this platform is SLAPP (Swarm-Like Agent Protocol in Python) which is
based on Python, and conceived and maintained by Pietro Terna (2019).12
The REPAST (Recursive Porous Agent Simulation Toolkit) platform was
introduced by Sallach, Collier, Howe, and Nelson (North et al., 2006).13
REPAST is a platform that owes a lot to Swarm, and it is proposed in three
variants: RepastJ is based on Java, Repast.Net is based on C#14 in the Microsoft
.Net environment, and RepastPy is the latest development in Python. Like
Swarm, REPAST also has a discrete event scheduler, a graphical interface
(GUI) to manage variables and parameters, an analysis and visualisation tool,
and a tool for spatial localisation of the agents in a simple way (2D grid) or
a realistic way (networks and GIS).15 It also has a tool to use genetic algorithms
and neural networks useful for parameter calibration. Although younger than
Swarm, REPAST is also extensively documented, making it particularly
attractive.
The MASON (Multi-Agent Simulator of Neighborhoods) platform was
introduced in 2003 (Luke et al., 2005) as an ABMS platform fully developed
in Java.16 More so than Swarm and REPAST, MASON is capable of handling
large-scale models and has 3D visualisation tools. Being younger, it is less
widely used, its documentation is reduced, and it also requires more learning
effort to use, making it less attractive than previous platforms, but the number of
its users is growing.
NetLogo is a platform conceived by Wilensky (1999) for ABMS; it is widely
diffused because mainly aimed for didactical purposes, and so it is very easy to
use.17 As its heir StarLogo is based on the Logo logic developed in the second
half of the 1960s.18 Its simplicity and its main educational goal do not make it an
ideal tool for realistic and large-scale simulation; however, it does not require
any computer or programming skills and, in any case, many research models

12
https://en.wikipedia.org/wiki/Python_(programming_language); https://terna.github.io/
SLAPP/.
13
https://repast.github.io/index.html.
14
https://en.wikipedia.org/wiki/C_Sharp_;(programming_language).
15
https://en.wikipedia.org/wiki/Geographic_information_system.
16
https://cs.gmu.edu/~eclab/projects/mason/.
17
https://ccl.northwestern.edu/netlogo/; http://ccl.northwestern.edu/netlogo-ccl.shtml.
18
https://education.mit.edu/project/starlogo-tng/; http://web.mit.edu/mitstep/starlogo/index.html;
https://en.wikipedia.org/wiki/Logo_(programming_language).

have been developed in this environment. Currently also available is the

OpenStarLogo version, an open-source release based on Java.
EcoLab is an advanced ABMS platform introduced by Standish and Leow
(2003) and owes its name to a research project dedicated to the dynamics of
evolution.19 The EcoLab platform is developed in C++ and requires C++
programming skills to implement the models. Although it is sufficiently docu-
mented, the references are mostly based on specific research models. All this
makes EcoLab less attractive than other solutions for different research fields,
especially in the social sciences. One of EcoLab’s strengths is that it can handle
large-scale models, that is, with millions of agents, because its applications can
be distributed over a network of computers by exploiting the power of parallel
computing.

2.2 A Guide to the Literature on ABMS Tools

The main goal of this section is to provide a guide to the literature on tools for
ABMS so that the researcher can find himself facilitated in choosing the most
suitable platform for the project. The logic we will adopt is ‘historical,’ that is,
we will start with the most recent review and work our way back to the oldest.
As will be noticed, the necessity to pass in review the various tools is parallel to
the increasing interest for the ABMS, in all the fields of search, that has
determined its proliferation. Many other reviews are available, but the ones
we will discuss here are those we consider most general. It will also be noted
that we can define a set of platforms that all the reviews discussed deal with, but
each provides details that are only hinted at by others. In the bibliographical
references of each contribution, one will be able to find the reviews that we do
not discuss here.
To our knowledge, the most recent and comprehensive review on platforms
for ABM development is that of Pal et al. (2020), which describes the main
characteristics of two families of platforms. As far as the ‘general purpose’
platforms are concerned, 36 are described, of which 26 are open-source and 10
commercial. For the ‘special purpose’ platforms, 48 are described, almost all
open-source. Finally, there are also 50 platforms whose status and license are
unclear. At present we can therefore conclude that more than 132 platforms are
available and the authors for each one report the reference language, the
website, the type of license and a brief description of the use. In addition to
this remarkable review effort, the authors also offer a brief history of agent-
based systems and the main fields of application.

19
http://ecolab.sourceforge.net/ecolab.html.

Abar et al. (2017) describe 86 platforms, specifying, for each, the reference
language, the types of agents and interactive behavior, the language or
Application Programming Interface (API) for development and the possibility
of an Integrated Development Environment (IDE), the compiler, the operating
system that supports it and the type of computer on which it can be run, the
modelling capability and scalability of the models, and finally, providing a brief
description of the field of use. In this study, there is also a very important section
(section 4.1) devoted to the general criteria for comparing the platforms.
Leon et al. (2015) propose a review of the tools for ABMS by grouping them
into five broad categories: (1) 23 General Purpose Platforms, (2) 6 Modelling
and Simulation Platforms, (3) 8 Special Purpose Platforms, (4) 40 Platforms No
Longer Under Development, and finally (5) a list of 14 Methodologies for
Multiagent Systems Development. In each of the categories 1 through 4 they
identify projects in existence from those that have been suspended or whose
status is unclear. Compared to the reviews, for each of these categories it
provides less technical detail but proposes a broader description, including
additional references and information.
The review of Kravari and Bassiliades (2015) is different from those just
presented. In fact, although proposing a list of 24 platforms, this contribution
puts a lot of attention on a list of ‘universal criteria’ with which to classify them.
The authors explain that they installed all the platforms they analysed and for
each one they performed some experiments based on the available ‘tutorials’, to
evaluate the slope of the learning curve for each tool. Without going into details
we briefly report the five evaluation criteria adopted: (1) Platform Properties:
‘basic characteristics that are necessary for a potential user/developer in order to
understand the scope and the domain of the platform’; (2) Usability: ‘suitability
of the platform for the construction of agent applications’; (3) Operating Ability
(quality): ‘aspects that are taken into account during execution’; (4) Pragmatics:
‘external factors that are neither related to the construction nor to the operation
of the platform’; (5) Security Management: ‘security issues, indicating if the
platform is considered safe or not’. The 24 platforms analysed are described in
five synoptic tables, one for each of the preceding criteria. Finally, three
additional criteria are considered: the programming language required for use,
the FIPA (Foundation for Intelligent Physical Agents) Compliance,20 although
FIPA is now integrated into the IEEE (Institute of Electrical and Electronics
Engineers) Computer Society,21 the scope and possibility of using Semantic
Web Technologies.

20 21
www.ﬁpa.org/. www.ieee.org/; www.computer.org/.

Bădică et al. (2011) propose a further alternative review because they also
focus on the languages used to build the platforms and not only on the platforms.
The authors provide a detailed description of 19 programming languages with
which it is possible to implement Agent-Oriented Programming (AOP) tools that
focus on the notion of ‘agent’ endowed with some characteristics such as ‘mental
qualities’, ‘communicative skills’ and the ‘notion of time’. In this regard, table 1
describes 37 ‘agent’s features’, of which in Sections 1.1 and 1.2 we have brieﬂy
discussed only a part. Agent-Oriented Programming is a specialisation of the
OOP paradigm, and the authors highlight both the differences between ‘agents’
and ‘objects’ and how the AOP language

provides a high level of abstraction directed towards developing agents and

incorporates constructs for representing all the features defined by the frame-
work. Most of all, it should allow developers to define agents and bind them
to specific behaviors [87]; represent an agent’s knowledge base, containing its
mental state; and allow agents to communicate with each other.

The languages covered are grouped into three major categories: eight Agent-
Oriented Programming Model, seven BDI based programming languages, and
four Other Agent Languages. Very important is table 3, placed at the bottom of
the text, which proposes a ‘Summary of Agent Languages’ for synoptic com-
parison according to seven criteria: the availability of a web site, the availability
of an IDE, the implementation language, the agent platform integration, the
field of application, the type of paradigm and, very important, the availability of
a textbook of which, in bibliography, they report the references. After this
description they also consider 13 platforms among the most popular at that
time, which can still be valid today.
Allan (2010) describes 31 software packages and 13 multi-agent systems, in
addition to collecting some applications in different fields. It also discusses the
ABMS in the HPC (High Performance Computing) area.
Bordini et al. (2006) discuss three arguments: the languages, the Integrated
Development Environments (IDEs), and the platforms. Languages are classified
in three categories: (1) declarative, ‘characterised by their strong formal nature,
normally grounded on logic’, (2) imperative, ‘in practice agent notions are often
implemented in an ad hoc manner’, (3) hybrid, ‘programming languages which
are declarative while at the same time providing some specific constructs allow-
ing for the use of code implemented in some external imperative language’. After
that, eight IDEs are described. Integrated Development Environments focus on
the programming language level and intend to enhance the productivity by
automating tedious coding tasks. The authors propose five criteria for classifying
IDEs based on functionality: project management, creating and editing source

ﬁles, refactoring, build and run processes, and testing. Finally, they propose the
description of ﬁve dedicated platforms.
A separate discourse deserves the review of Krešimir et al. (2020) because, to
our knowledge, it is the only one dedicated to teaching tools, which makes it
particularly interesting for the development of ABMS as a discipline. Because
of this peculiarity, this review is different from all the others discussed here
because it must also consider organisational aspects of teaching. In this contri-
bution 17 didactic tools are described, among which there are those of the so-
called Logo family, and a synoptic comparison is proposed based on six criteria:
the type of license, the language or API, the possibility of IDE, the operating
system, the type of computers on which it is possible to install them and the
degree of complexity on a learning curve.

2.3 General Characteristics of an ABM

In dealing with ABM we resort to computer simulation, that is, programmable
apparatuses that we can interrogate by means of an interface, to which we can
provide inputs to obtain a response in a finite time. The formal development of
economic theories can also make use of any real-valued functions, of non-finite
sets or of countable infinities, but for their models to be made operational,
namely, to be implemented in computer-executable programs on real data, it is
necessary to base them constructively.22
In what follows we describe some of the main general characteristics that can
be implemented in an ABM (Bonabeau, 2002) from the most particular elements,
at the level of the agents – autonomy, heterogeneity, and interaction – to the more
global ones, at the system level – discontinuity, discreteness, and flexibility.
Considering autonomous agents means that their actions are not coordinated by
an auctioneer or a top-down centralised mechanism. In ABM, heterogeneity is
both between agents – different species are considered, for example, firms and
households – and within – all agents of the same species are not identical.
Differences may concern structural aspects of the agents, related to their endow-
ments or to states that may change during the simulation. Another aspect of
heterogeneity that can be considered is related to behavioural aspects, such as
preferences and methods of expectation formation (Hommes, 2013; Dosi, 2023;

22
Constructivism is a way of doing mathematics which is based on Brower’s intuitionist philoso-
phy, according to which in mathematics there exist only objects of which it is possible to specify
a mental construction. Thus, one cannot accept the existence of a mathematical object on
a logical basis alone, but one must deﬁne a procedure for constructing it, hence demonstration
by reductio ad absurdum cannot be accepted. This approach therefore leads to the rejection of
a large part of classical mathematics, but lays the foundations for recursivity and computability,
as an application of logic to computer science.

Palestrini et al., 2021) or learning methods (Sargent, 1993), see also Landini et al.
(2014, 2015). With ABMS it is also possible to simulate anticipatory behaviour
(Rosen, 1985), namely, of agents who, based on an expected scenario, prepare
today the conditions to act tomorrow to obtain the expected result the day after
tomorrow; see Di Guilmi et al. (2017) and the literature on evolutionary strategic
games.
As explained in Section 1.2, an essential aspect of human behaviour that can
be explicitly considered in ABMS is direct interaction (between agents). By
direct interaction we mean the case of (at least) two counterparts meeting to
interact. Not infrequently, the simulation of these relational processes follows
probabilistic rules to generalise these processes in a plausible way. For example,
given the units of the system one can assume that each one is randomly coupled
with a subset of counterparts to interact with. The interaction can be represented
in a network where the agents are the nodes, and the interactions are the links. In
the case of indirect interaction there are no links between agents, but only links
between them and the ‘market’. With interaction comes an essential component
of complexity, connectivity (Casti, 1979; Wassermann and Faust, 2008; Scott
and Carrington, 2011; Caldarelli and Catanzaro, 2012; Knoke and Yang, 2019).
Note that direct interaction is one of the holistic factors that inhibit reductionism
(see Box 2 in Landini et al., 2024), the other being feedbacks.
The agents of an ABM simulating a socio-economic system are autonomous,
heterogeneous, and interacting in a diversified multi-level network structure.
Under these conditions it is possible that some individuals change their prefer-
ence patterns, opinions or orient their decisions differently to such an extent that
a discontinuity is created. In an ABM it is possible to simulate the introduction
of innovations that create discontinuities, far beyond the idea of an exogenous
shock. These and other examples of discontinuities are explicitly simulated in
an AB-Model (Bellomo et al., 2020; Giordano et al., 2020; Pescarmona et al.,
2020). If we simulate individuals with differential equations the discontinuity
would be difficult to observe, except in the case of some chaotic models, and the
alternative would be to use stochastic jump processes, whose trajectories are
continuous at least to the right. Instead, with agent simulation, precisely because
it implements a structure of logic gates in the emulation of decision processes, it
is possible to explicitly take account of actual discontinuities right from the
micro level.
An ABM must be completely characterised by the discreteness of its
dimensions: the events it describes are discrete because they occur at
distinct times on a discrete and finite time horizon and in discrete and finite
space, if only because these are the limits imposed by the limited numerical
calculation capacity of computers. Thus, each agent is a discrete-event

decision machine, which in its actions simulates real processes as a

sequence of discrete events in time and space, be it a mapping of physical
space or a topological space.
In an ABM the equations of motion that describe the evolution of the agents’
characteristics over time are finite horizon difference equations, linking the out-
comes of events occurring at time t 1 with those of time t, on which those of
time t þ 1 will depend. Sometimes different phenomena follow different clocks,
for example, the worker serves every day, is paid at the end of the month, but
spends on consumption every day. With reference to space, we have more topics
because different types of space can be considered explicitly in an ABM. The
mapping of a physical space may consist in locating the units of the system on a
real geographical space but on a reduced scale. One can also consider a fictitious
geography: grid structures (lattice) – typically two-dimensional – in which to
locate agents. A more abstract perspective employs networks (or graphs) in
which nodes represent given locations, for example, interchange points for
commuting, communication, or exchange of goods and information. Finally, a
further perspective defines a topological space of states whose degrees of
freedom are established by the state quantities that characterise the states of
individual agents. For example, let us assume that we can distinguish between

large and small firms: X1 ¼ x1;1 ¼ big; x1;2 ¼ smallg. In addition, firms may
be indebted or financially self-sufficient: X2 = {x2,1 = indebted; x2,2 = aut-
archic}. We can now construct a two-dimensional state space S2 ¼ X1 X2 that
results in a table of four cells; individual firm-agents can migrate from one status

cell to another. Each cell is then identifiable with a state vector wh ¼ xi;1 ; xj;2 ,
and each can host a given number Nh of agents. Thus, by coupling the
state vector to its occupation number mh ¼ ðwh ; Nh Þ we can describe the micro-
state of the system M ¼ fmh: h ¼ 1; . . . ; Hg. Therefore, due to subsequent
decisions – actions of autonomous agents that are heterogeneous and interact-
ing – along the simulation, we can describe the system’s evolution through time

mh;t ¼ wh;t ; Nh;t . This method is generalisable to many dimensions and builds
a bridge of communication between ABM as a simulation laboratory for
complex systems and the methods of statistical physics appropriate to the
description of complex systems (Di Guilmi et al., 2017).
Agent-Based Modelling is very flexible in several respects. First, the basic
model can be enriched with a larger number of agents, thus enlarging the scale.
This can be useful, for example, to assess whether the model is robust with
respect to scale and whether it develops coordination phenomena or self-
organised criticality (see Box 5 in Landini et al., 2024). We can also enrich
the model from a behavioural point of view by specifying more decision rules.
Furthermore, it is possible to extend the number of agent species by taking the

model to a higher level of complexity. Thus, from a basic model we can extend
its scale, make the behaviour of agents more sophisticated and make the system
more and more complex by extending its ‘ecology’ to capture and describe
emerging phenomena and find more and more correspondence to the stylised
facts. There is also another aspect of flexibility that is worth considering,
portability: any ABM can be specified with paper and pencil and can then be
implemented on the computer at low cost, both with many dedicated agent
simulation environments and with a wide range of programming languages,
both low- and high-level, thus being able to operate, overcoming the rigidities of
dedicated environments.

2.4 Validation
The social sciences study situated phenomena that happen under given conditions
in space and time. Many of these phenomena are not replicable, either because the
conditions change over time or because they are not found identically in space, or
because they emerge from below in an unpredictable way. Also, for these reasons,
the explanation of facts in the social sciences occurs through interpretive models,
not necessarily quantitative, that represent facts based on one or more theories. In
economics, but not only, a theoretical-conceptual model can have practical,
empirical use, especially when it is translated into a program executable by
a computer. In all cases, a model is always a partial representation of a situated
phenomenon and considers only the elements thought to be essential to explain
the facts, neglecting many details that can be treated in future developments. In
such a sense, every model is formulated for understanding a simplified represen-
tation of the reality, useful for understanding the principles at the bottom of it, and
this also applies to this theory.23
For a real fact several models can be specified, even based on the same
reference theory. In the social sciences, there is no ‘right’ theory to interpret
facts nor is there an ‘exact’ model to describe them. Moreover, different
methodologies can be adopted to specify different models even from the point
of view of the same theory. Not infrequently, one has several theories of
reference, sometimes complementary but also alternative. A problem then
arises. If for the same fact you can have different theories from which descend
models methodologically different, then the question is how to assess the
goodness of the theoretical implications and results of a model to establish the
best possible explanation, at least until proven otherwise.
23
Parisi (2006) invites us to reflect on the fact that even Descartes assumed the absence of friction
to describe the motion of bodies, although in a world without friction we could not be alive: we
could not move or feed ourselves; in fact, food would escape from our hands, assuming we were
able to get a hold on it.

If among the various models available we can isolate the one we consider the
‘best’, then we also know its methodology and we can even go back to its theory
that, therefore, we can consider as the most appropriate. The issue is very
complex because to evaluate the goodness of the results of different models
that transcribe different theories sometimes different evaluation protocols are
needed.
We now narrow our focus to the class of agent-based models. In this area,
the evaluation practice is called validation because its purpose is to assess
whether the model can be considered a valid factual knowledge base. It is not
impossible that two different agent-based models, implementing two alterna-
tive theories, can be valid knowledge bases. However, if a model is validated
in the sense previously mentioned, and that we will elaborate in what follows,
then it can be considered a scientific tool. Consequently, with a validated
model we can do experiments and sometimes even extrapolate predictions to
further the knowledge we have. If a model is validated, then it provides
empirical support for the theory it implements and allows for further deve-
lopment. In any case, it is good to be aware, a theory supported by a validated
model will be a valid basis of knowledge until proven otherwise, both in the
natural and social sciences.
In the social sciences, but not only, the model does not have to be exhaustive of
reality, nor is it relevant that it is very sophisticated. What matters is the rigor with
which it has been specified and with which it is able to answer research questions
and explain a part of the mechanisms that the theory supposes are at the base of
the phenomena it deals with. Even a simple model with few goals can provide
a valid knowledge base if it passes validation. The specification of a model can be
considered as a moment along the path of (social) research with scientific method
and rigor. Furthermore, a (social) simulation model that is validated can be
a computational laboratory, and computer simulation can play the same role
that empirical experimentation plays for natural, life, or engineering sciences.
Validation is the crucial step that closes the development of an ABM model.
As important as it is, there is no standard validation protocol, no procedure
unanimously agreed upon by the scientific community, nor are all ABMS
validated. What we do have is an evolving but poorly standardised set of ‘best
practices’ or ‘guidelines’. In fact, validation is an area of research in continuous
development.24 There is no lack of procedures, nor of innovative ideas. What is

24
Beyond the books of Gilbert (2020) and Rand and Rust (2011), we consider particularly
important the contributions of Borgonovo et al. (2022), Platt (2020), Fagiolo and Richiardi
(2018), Richiardi (2018), Colasante (2017), Bargigli (2017), Stonedahl and Rand (2012), Borrill
and Tesfatsion (2010), Frank et al. (2009), Bianchi et al. (2008), Windrum et al. (2007), and
Leombruni et al. (2006).

Table 1 A summary diagram of the validation process

Consistency Correctness
Evaluation 1 VERIFICATION: 3 FALSIFICATION:
A. Programmatic C. Test cases:
testing C.1 Corner cases
A.1 Unit testing C.2 Sampled cases
A.2 Code C.3 Speciﬁc scenarios
walkthroughs D. Micro-face validation
E. Meso-face validation
F. Macro-face validation
G. Empirical output
validation
G.1 Stylised facts
G.2 Real-world data
G.3 Cross-validation
Conformation 2 CONTROL: 4 PARAMETRIZATION:
B. Programmatic testing H. Test cases:
B.1 Debugging H.1 Relative value
walkthroughs testing
B.2 Formal Testing I. Empirical input validation

needed is a systematisation of the literature on validation, also starting from

a shared definition of at least the main concepts and terms. Our aim is to present
an interpretative scheme, and logically ordered, of the various steps with which
to proceed to the validation process.
Validating an ABM means adopting a set of replicable procedures to
‘conform’ the results and ‘evaluate’ their conformity to given evaluative
criteria. Mainly, the evaluation criteria we isolate are ‘correctness’, as the
correspondence between the results and the actual data or shared knowledge,
and ‘consistency’, as correspondence between the specification of the model
and the theory, checking for possible contradictions. By combining proce-
dures and criteria we attempt to logically organise a ‘validation process’
largely drawing from Gilbert (2020) and Rand and Rust (2011) according to
the following scheme (Table 1).
We introduce a general definition: the validation of a model is the process of
evaluating the goodness of the results of a model to determine whether it can be
considered a valid knowledge base. Understood as a ‘process’, validation is
a succession of logically ordered steps. One can also consider that the validation
of a model proceeds in parallel to its formalisation and the development of the
code. In fact, there are some tricks that can be followed from the beginning, such

as taking extreme care both in formalising and writing the code, avoiding
ambiguities to make everything as readable as possible even for those who do
not participate in the project. In the writing of the code, it is important to
accompany it with many comments that explain the various passages, that can
be very useful in the transfer of the code between the various groups of
development of the project, or in order to render it public, that is, ready to be
used by other researchers, or in order to remember quickly what is being
executed in given passages in the forecast to resume the model in the future.
Different ‘assertions’, that is, messages that alert the programmer during the
execution, as an example when some returned values are not admissible, can be
inserted. Besides, to quickly identify conceptual errors of programming it can
be useful to make intermediate outputs return to the program, especially for
those sections that will not have to return results.

1. The ‘veriﬁcation’ of a model is the ‘evaluation with respect to consistency’

to ensure that the model does what the theory prescribes. A model is verified
when it formally and operationally decodes a theory, also from the point of
view of calculation programs. Verification must precede all other steps. If
a model does not represent the theory, then it must be reformulated. In the
same way, if the program does not implement the logic of the model, then it
must be cured. After verification, the theory, the model and the program may
be considered as synonymous.
There are some steps that can be considered in the verification. Having
established that the conceptual model and the formalised model match, two
tests can be conducted. The ‘programmatic tests’ of verification concern the code
of the program that implements the model. Between these, the ‘unit testing’
consists in predisposing a specific test for every section of the code, as it is being
written to verify that there are not procedural errors. Once a section has been
verified, we proceed with the development and testing of the next one so that
each section performs as expected. The ‘code walkthroughs’ consist in gathering
a group of scholars of the theme in object to discuss with the programmer the
entire code and to verify the logical correspondence between the conceptual
model and the program.
2. The ‘control’ of a model is the ‘conformation with respect to consistency’,
namely, the search for and removal of all possible contradictions. We say then
that a model is controlled when it is free of logical contradictions. Control
‘programmatic tests’ are used to check that the implemented model performs
what the programmer thinks it should. Among these, ‘debugging walkthroughs’
consist of running the program with the purpose of checking that it generates
results correctly. ‘Formal tests’ employ logic tools to check that there are no

contradictions in the implemented formal model; sometimes agent models are

very large and so complex that formal tests are difficult to perform.
3. The ‘falsification’ of a model is the ‘evaluation with respect to empirical
correctness’, namely the construction of the model as the experimental moment
of a theory. We say that a model, and thus its theory, is falsifiable if we can use it
to perform an experiment whose results are comparable with the available data.
Thus, by means of its verified model, the theory becomes falsifiable and
assumes scientific connotation (see Box 12 in Landini et al., 2024).
In this area of validation there are several tests that can be conducted. Test
cases are of various types. Among these, the ‘corner cases’ use extreme values
of some inputs to evaluate if the program returns sensible results even in
‘stressed’ situations, for example considering a minimum number of agents or
the maximum number allowed in the execution of the model. The ‘sampled
cases tests’ are preparations of some inputs of which we do not know the
outcomes until we execute the program but of which we have an idea about
the range of variation of the values that will be returned in output. In this case
the evaluation is positive if the results on some quantities of interest do not
exceed the limits that we expect. If for input data it is known from the
conceptual model what the outputs must be, then we conduct the ‘specific
scenarios test to estimate if the implemented model is able to reproduce them.
This type of test is one of the first ones you run, but it is rather weak and is not
in itself sufficient to guarantee that the code is bug-free’ (Gilbert, 2020; p. 61).
At this stage of the evaluation process, three sorts of validation can be
considered. The ‘micro-face validation’ consists in evaluating if the agents of
the model, their behaviours and their properties correspond in a satisfactory
way to the agents of the real world. The ‘macro-face validation’ consists in
evaluating if the aggregate dynamics returned by the model correspond to real
aggregate dynamics.

In both micro- and macro-face validation, no data are directly compared

to the model: instead, the focus is on showing that the general patterns,
attributes, and processes have an explainable correspondence to the real
world. It is usually sufﬁcient to describe the relationship between the
model and the world to show that it has been validated ‘on face’. (Rand
and Rust, 2011; p. 189)

Finally, the ‘empirical output validation’ is the phase considered most import-
ant because it consists in assessing whether the model’s results correspond to the
real world with regard to the reproduction of the ‘stylised facts’, especially if the
main objective of the model is that of a conceptual experiment or to evaluate
hypotheses or a theory, or of the ‘real-world data’, if the objective of the model is

predictive. In every case, the ‘empirical output validation’ aim is to estimate if

and how the stylised facts or the real data can belong to the outputs of the model.
To such an aim, it can also be considered the ‘cross-validation’ that consists in
estimating how much the results of the model in way of validation depart from
those of a model already validated.
4. The ‘parameterisation is the conformation with respect to correctness’, namely,
the quantification of parameters to make the results as close as possible to
reality. A model is ‘well parametrised’ when the values of the parameters make
it possible to interpret time series or real data or can replicate stylised facts. To
this end, after verification and control have passed the test, falsification and
parametrization can be reiterated. This means that once the consistency of the
model has been ascertained, then various degrees of correctness can be reached
repeating some passages of falsification, based on initial parameterizations, and
of parameterization, to make the results increasingly approach the reality.
In this phase they can be lead of the ‘test cases’ said ‘relative value test’ with
which it is checked if the relations noted between input and output change in
a predictable way whenever some inputs are modified. At last, the ‘empirical
input validation’ consists in estimating if the data that come supplied in input
to the model are accurate and correspond to the reality represented from the
model, in fact it is sufficient to describe like these data in input have been
produced.
In the context of parameterization, estimation and calibration are adopted:
some (e.g., Platt, 2020) find the distinction between these two terms unclear to
the extent of not finding sufficient reasons to distinguish them, while others
(Grazzini and Richiardi, 2015; Delli Gatti et al., 2018) distinguish between
estimation and calibration. In any case, it is only after setting parameter values
that we can proceed to run a simulation and compare the results with the
reality of the data. A verified, controlled, falsified, and well parameterized
model has reached the level of valid scientific knowledge base.

The calibration of an ABM is carried out to achieve results that are as close as
possible to real data or known information, either empirically or automatically.
Empirical calibration consists of conducting a controlled experiment to deduce the
values of certain parameters from its outcome, or secondary data from similar
experiments can be used. Within the framework of empirical calibration, one can
also deﬁne the initial conditions of the quantities characterising the agents.
Empirical calibration is based on real data, so it seems to be the preferable one
because it is able to give a justiﬁcation to the choice of parameters, but it has some
drawbacks because it is very expensive – rewarding individuals, recruiting them,
preparation and execution time – and it does not guarantee that the evolution of the

model is valid because some parameters of the model could vary in time instead of
being constant.25 Automatic calibration is based on the use of calibration tools,
such as ‘genetic algorithms’ or ‘machine learning’ procedures. Typically, auto-
matic calibration considers a real training database, often smaller than the test
database used for validation purposes. The former is used to identify the values of
a set of parameters that make the simulated database as close as possible to the real
training database. For example, employing the genetic algorithms, one specifies
a ‘fitness function’ that must be optimised, usually minimised, with respect to
a margin of error between simulated and real data: once the fitness function is
established, the parametric setup that has generated the least error is adopted. The
advantage of this practice is that it is managed by the computer, also using
applications specifically designed for this purpose, so it is therefore particularly
efficient and low-cost, but it has the disadvantage of leaving the choice of which
measure to optimise to the researcher.26 Sometimes more than one measure is used
for different purposes, with the ex post evaluation of which solution is preferable.
In addition, the correlation criterion can also be used to assess the best parameter-
isation, thus choosing the set of parameters that makes the simulated data more
positively correlated with the real data. Another disadvantage of this practice is
that, if the real training database is not representative of the real test database, it
may not be possible to validate the conformity of the model with reality, even
though it has been calibrated with real data: the solution, in this case, can be found
by starting from an overall real database, extracting from it a statistically represen-
tative sample as the training database and using the remaining part in the test
phase. Finally, in contrast to empirical calibration, rather than a disadvantage,
automatic calibration has the not insignificant limitation of returning a valid
parameterisation without explaining why, leaving this burden to the researcher.
Like calibration, ABM estimation employs real data to make inferences about
model parameters.27 However, unlike calibration, estimation uses an inferential
structure, with given statistical properties, and does not take place at the same
time as the simulation but is based on one or more simulations characterised by
their parameters. Put another way, calibration runs the model to search for
parameter values, while estimation employs the simulation run with a given
set of parameters, perhaps those resulting from the calibration to improve them:
in this case the calibration may serve to narrow the value space for the
parameters. Again, the strategy is to optimise the parametric setup so that the
model is as close as possible to the actual data – in fact, the minimisation of an
error measure is still considered. The estimation can be based either on point
25
See Colasante (2017) and literature cited therein.
26
See, for instance, www.behaviorsearch.org.
27
See Richiardi (2018), Bargigli (2017), and the literature cited therein.

data (simulated minimum distance method) or, as a special case, on

moment data (method of simulated moments) of the empirical distribution of
the real data. In any case, the estimation procedure is bound by the statistical
criteria of the inferential method and may conclude with a result which,
although optimal with respect to these criteria, may not be satisfactory from
a practical point of view. That is, it may happen that the parameter estimate
satisfies the inferential criteria but with an unsatisfactory ‘fitting’ capacity: for
example, the various p-values may well be adequate, but the goodness of fit is
insufficient to rely on this parameterisation. Finally, to clarify the difference
between calibration and estimation, in Grazzini and Richiardi (2015) it is
explained that calibration has as its main purpose to find results that are
consistent with the observed data while estimation is also concerned with
producing accurate estimates of the parameters of the data generating process
(DGP). If no real data is available, one can only proceed to manual fine-tuning
in the perspective of simulating stylised facts known in the literature.

2.5 Sensitivity Analysis

Sensitivity and uncertainty analysis of a mathematical simulation model that is run
on a computer are the practices to be followed to ‘study’ the model so that it can be
used consciously, which is especially relevant if the model is designed as
a ‘problem solving’ or ‘decision making’ tool. These areas of research are con-
stantly evolving, mainly due to the increasing computational capacity that makes
them applicable to large-scale and complex models with many inputs such as
parameters, assumptions, and exogenous data. The basic principle of sensitivity
analysis is to assess the relative importance of the inputs to a model in terms of the
variability of the outputs and in this respect it differs from uncertainty analysis,
which is concerned with measuring how variable the predictions of a model are as
the inputs change without assessing their relative importance. The two fields are
distinct but are often confused as equivalent: ‘This is perhaps due to an influential
econometric paper (Leamer, 1985) . . . whose problem setting and motivation were
to ensure the robustness of a regression analysis with respect to various modelling
choices . . .. As a result, in economics and finance, it is common to see the
expression “sensitivity analysis” used to mean . . . “uncertainty analysis”’ (Saltelli
et al., 2019; Learner, 1985). These authors then point out several problematic
arguments of sensitivity and uncertainty analysis in many research fields, among
these arguments the misinterpretation of terms and the different degree of statistical
expertise are the most relevant. Above all, however, these authors emphasise the
fact that sensitivity analysis and uncertainty do not have a circumscribed disciplin-
ary scope because mathematical modelling is not a discipline in the proper sense.

As Morton and Tejada (2013) explain, in very general terms, sensitivity

analysis of a model consists of varying some inputs, sometimes simultaneously,
to evaluate the corresponding changes in the outputs. If we vary one input at
a time (one-at-a-time; OAT), we speak of local methods. The OAT method is the
simplest, and computationally least intensive, and consists of changing only one
parameter while leaving all others unchanged to evaluate the effect of the
variations, typically by considering the variance of the output. The merit of
this method is that it allows one to easily trace the variations of the outputs that
are more significant than those of the inputs that generated them. The limitation
of this method is that when the model is very complex, inaccurate results may be
obtained, also because the choice of which input to vary, and to what extent, is
sometimes arbitrary. Moreover, since it only considers one input at a time, OAT
does not allow for the evaluation of interactions between variations in the
inputs.
Global methods allow the variation of several inputs together. For more
complex models, sensitivity analysis is based on variance-based methods,
such as Sobol (2001). This method estimates the contribution of each input to
the model’s uncertainty measure by means of two elements: the first-order
sensitivity, which evaluates the contribution to the variance of the output for
each input relative to the total variance, and the total sensitivity index, which
evaluates the contribution to the variance of the output considering the uncer-
tainty due to the interaction of the input with all others. The logic of this method
is very simple but suffers from the fact that it assumes independence between all
parameters, thus it does not allow for the evaluation of joint variance effects
(Granato and Li-Jessen, 2020).
About sensitivity and uncertainty analysis, among others, the most important
references are Saltelli et al. (2004), Saltelli et al. (2008), and Ghanem et al. (2017).
The basic idea of sensitivity analysis is very simple, but some terminological
precautions are necessary. First, one must consider that by model inputs one
means the parameters characterising the model variables, the functions describ-
ing them, or even the assumptions or hypotheses underlying the model specifi-
cation. Secondly, one must consider that by outputs one does not mean the
simulation results but the reliability measures that inform the correctness or
fidelity of the underlying model with respect to the reality being modelled
(Morton and Tejada, 2013). Dependent on these assumptions is the fact that
outputs are always estimates derived from Monte Carlo sampling methods on
the space of inputs and, therefore, output measures, in turn, are ‘estimates’,
hence contain errors with respect to ‘true values’ that cannot in fact be calcu-
lated with absolute precision. The main sources of these errors are typically
three: (i) those due to sampling on the parameter space, (ii) those due to

uncertainties related to the inputs, and (iii) those due to the degree of correctness
with which the underlying model represents reality.
There are several methods to sensitivity analysis, but all explore differ-
ences in outputs from changes in inputs. Depending on the method of
changing the inputs and descriptively summarising the outputs, there may
be different approaches to sensitivity analysis. However, regardless of the
approach to sensitivity analysis, a key aspect is to understand which inputs
are signiﬁcant, that is, those that induce the most relevant changes in the
outputs. This is particularly relevant when subjecting a model for ‘problem-
solving’ or ‘decision-making’ to sensitivity analysis. In other words, we can
consider sensitivity analysis as the phase of studying the model to identify
the most ‘sensitive’ parts, so as to be able to control its behaviour and correct
its weaknesses.
Among the most accredited practices for sensitivity analysis, Morton and
Tejada (2013) propose a ten-step set of guidelines, which we merely list here,
referring to their text for more details:

1. Deﬁne the sensitivity analysis model.

2. Select the outputs of interest.
3. Select the inputs of interest.
4. Select parameter values or their variation ranges.
5. Estimate outputs conditional on inputs.
6. Synthesise the outcome of the analysis using tornado-plots.
7. Quantify uncertainty graphically.
8. Synthesise input and output variations using spider-plots.
9. Visualise the simultaneous interaction of variations on multiple inputs.
10. Metamodels and experimental designs.

Saltelli et al. (2019) propose a list of best practices for conducting an adequate
sensitivity analysis. First, they propose the global exploration of the input space,
especially useful for models in which inputs interact with each other or in which
many nonlinearities are found. Secondly, they propose conducting uncertainty
analysis ﬁrst to assess robustness and then sensitivity analysis to understand the
major causes of variability. As a third piece of advice, they propose to focus the
sensitivity and uncertainty analysis on one or a few precise questions because,
typically, models have many outputs that can be used for different purposes, so
the relationships between the inputs and the individual outputs may be different;
therefore ‘it is essential to focus the sensitivity analysis on the question
addressed by the model rather than more generally on the model’. A fourth
aspect considered important is ‘reporting’, that is, the need to infer the relative
importance of inputs, and combinations thereof, through appropriate graphical

methods and measurements. Finally, they point out that even the most rigorous
sensitivity and uncertainty analyses do not guarantee the absence of errors
because if the correctness of the model is poor, that is, if it is not a good
representation of reality, measuring the sensitivity of a parameter is of little
relevance.
In the more specific area of ABM models, ten Broecke et al. (2016) explain
that even the most accredited sensitivity analysis methodologies may not be
sufficient for an accurate analysis of ABM models precisely because of their
specificities such as multi-level structures, interactions, nonlinearities, emer-
gent phenomena, and self-organisation. These elements make it very difficult
to link input and output as proposed by classical methods because it is
a question of analysing complex adaptive systems. However, for an ABM to
be usable for practical purposes, it is essential to understand the effects of
different configurations on the overall results emerging from the system. The
authors, through a comparative study of several methodologies, focus on three
objectives of sensitivity analysis for ABMS: (i) to understand how emergent
properties are generated by the ABM, (ii) to examine the robustness of the
emergent properties and (iii) to quantify the variability of the results according
to the parameters.
Borgonovo et al. (2022) propose a systematic approach for the sensitivity
analysis of ABMS focusing on four purposes: (i) to assess the robustness of the
results, (ii) to identify the elements with the greatest impact on the results, (iii)
to understand how these elements interact, and (iv) in which direction the results
vary as the identified elements vary. The authors define a general conceptual
scheme to identify what they call ‘moving parts’, that is, the model components
that can be varied to assess the model’s sensitivity: parameters and procedures.
Furthermore, an important contribution is to propose a variant of the individual
conditional expectation (ICE) plots to take into account the stochastic nature of
ABMS (S-ICE plot). The protocol proposed in this contribution consists of six
steps, which we list here, referring to the text for further details:

1. Choose the outputs of interest,

2. Identify the objectives of the sensitivity analysis: prioritisation, direction of
change, interaction quantiﬁcation, robustness analysis,
3. Identify which elements of the model must vary,
4. Choose the appropriate sensitivity analysis method for target-element
matching,
5. Evaluate parameters with reference values to build the baseline scenario
(local analysis) or identifying ranges of variation (global analysis),
6. Summary and visualisation of results according to objective.

3 Conclusion
This Element is complementary to Complexity in Economics (Landini et al.,
2024), where inconsistencies of mainstream economics have been discussed
that can be overcome in the frame of Complexity Economics (Arthur, 2021;
Rosser, 2021). There, we reinforced the purpose of the ABM simulation approach
as the main tool for studying socioeconomic complex systems, as well as for
specifying and implementing more general and realistic models. In this Element,
we propose an overall and non-technical presentation of the main topics in ABM
simulation. In Section 1 foundational notions are introduced with some historical
background. Section 2 presents the general characteristics and tools of ABM with
attention to advanced topics like validation and sensitivity analysis. The structure
of the Element’s sections includes a reasoned and selected set of bibliographical
references.
The existence of competition between hierarchical economic institutions
implies problems of computational complexity, which can be handled by the
ABM method. This is an increasingly widely adopted approach, which differs
from important precursors of computer simulation such as system dynamics,
cellular automata, and microsimulation. Unlike ABM, system dynamics does
not allow for the modelling of heterogeneous micro aspects, but only inter-
dependencies and feedbacks between macro variables; cellular automata reduce
the interaction of dispersed micro entities to a single homogeneous parameter;
while microsimulation does not include interaction.28
Also, as Landini et al. (2024) highlight, Hahn shows that the AD model, being
an axiomatic system, has no normative value – without even mentioning the SMD
‘theorem’. Solow and Hanh (1997) then argue that reducing economic analysis to
mathematical reasoning alone, as the Dynamic Stochastic General Equilibrium
(DSGE) does, does not make economic sense. Instead, ABM manages to analyse
the system of interrelationships between agents at several hierarchical levels
through the analysis of nodes and the study of the topology of networks.
With ABM the methodology is ‘bottom-up’: individual parameters are esti-
mated with experiments and econometric surveys, their statistical robustness –
such as distribution – is assessed at an intermediate level between the micro and
the macro, and ﬁnally it is evaluated whether aggregate regularities emerge in
the whole. In short, there is micro, meso, and macro empirical validation and
new economic policy applications and tools for both the meso sector level and
the networks with which interactions can be analysed. The difference between
microeconomics and macroeconomics is that the latter is the emergent result of
the interaction and behaviour of agents at the micro level.
28
Brancaccio et al. (2021) show that the ABM literature itself is not heterodox.

The ABM approach is growing fast and evidences of applicability and results
about representation of real-world phenomena are accumulating. What is still
missing is a unifying formal theory. Literature evolves fast to such an extent that
it appears an ‘uncultivated forest’, hence there is need of systematisation. In
economics, this is due to the fact that many scholars recognise the potentialities
and advantages of ABM such that they prefer investing resources in the
development of models to overcome dissatisfaction with the mainstream
approach in economics. This blossoming without a formal theory does not
come without consequences. For instance, many scholars are sceptical and
think that ABM is a practice without theory, something far from an autonomous
discipline, just like econometrics, that finds application in a wide spectrum of
research fields.
Along this direction of theoretical research there is a lot of work that is to be
done. In this Element, we hope to have at least posed the problem to stimulate
students and scholars, mainly those that are not already familiar with this approach,
to join the effort in the development of a formal ABM theory to upgrade the ABM
approach to the status of a discipline with more defined boundaries.

ABM Agent-Based Model, Modelling

ABMS Agent-Based Model Simulation
ACE Agent-Based Computational Economics
AD Arrow-Debreu
AOP Agent-Oriented Programming
API Application Programming Interface
BDI Beliefs-Desires-Intentions
CAS Complex Adaptive System
DGP Data Generating Process
DSGE Dynamic Stochastic General Equilibrium
FIPA Foundation for Intelligent Physical Agents
HPC High Performance Computing
IDE Integrated Development Environments
IEEE Institute of Electrical and Electronics Engineers
OOP Object Oriented Programming
SFC Stock-Flow Consistent
SMD Sonnenschein–Mantel–Debreu

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Railsback, S. F, and Grimm, V., (2019), Agent-Based and Individual-Based

Modeling: A Practical Introduction, Princeton University Press.
Rand, W., and Rust, R. T., (2011), Agent-Based Modelling in Marketing:
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Riccetti, L., Russo, A., and Gallegati, M., (2015), An Agent Based
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Richiardi, M., (2018), Estimation of Agent-Based Models, in Delli Gatti, D.,
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Giovanni Dosi
Sant’Anna School of Advanced Studies
Giovanni Dosi is Professor Emeritus of Economics at Sant’Anna School of Advanced
Studies, Pisa (Italy) and Editor for the Americas of the journal Industrial and Corporate
Change. He is included in the ISI Highly Cited Research list, denoting those who made
fundamental contributions to the advancement of science and technology, and is a
corresponding member of the Accademia Nazionale dei Lincei, the ﬁrst academy of
sciences in Italy. He received, in 2016, the Wiley TIM Distinguished Scholar Award by the
Technology and Innovation Management Division of the American Academy of
Management, in 2022 the Penrose Prize of the European Academy of Management, and,
in 2024, the Schumpeter Prize. His major research areas – where he is author and editor
of several works – include economics of innovation and technological change, industrial
economics, evolutionary theory, economic growth and development, organizational
studies.

Mauro Gallegati
Università Politecnica delle Marche, Ancona
Mauro Gallegati is full Professor of Advanced Economics at the Università Politecnica delle
Marche, Ancona. His research concerns interdisciplinary applications of
complex systems with heterogeneous interacting agents and econophysics. He is one of
the pioneers of agent-based models and economic complexity. He published several
papers and books. His methods of asymmetric information settings are widely used by
academicians. His research interests range from ABM economics to economic history, to
mathematics, to complexity and networks.

Simone Landini
IRES Piemonte, Torino
Simone Landini is Senior Researcher at the Socioeconomic Research Institute of
Piedmont (IRES Piemonte), Turin, Italy. He holds a PhD in Mathematics for the Analysis of
Financial Markets, had been awarded the INET Grant and had been a Visiting Fellow in
the University of Technology of Sydney. His research interests include applied
mathematics, quantitative methods for economics, ﬁnance, regional and social sciences,
agent-based modelling and computability theory. He published articles in international
peer-reviewed journals.

About the Series

Elements in Complexity and Agent-Based Economics will present the state-of-the-art in
complexity and agent-based economics with the aim of oﬀering a systematic and
easy-to-access thematic organization of both consolidated results, and the latest
developments in the ﬁelds. Contributions are meant both as a support to scholarly
research and as teaching tools.

Elements in the Series

Complexity in Economics
Simone Landini, Giacomo Gallegati and Mauro Gallegati
Active Particles Methods in Economics: New Perspectives in the Interaction
between Mathematics and Economics
Nicola Bellomo, Diletta Burini, Valeria Secchini, and Pietro Terna
Agent-Based Modelling: A Tool for Complexity
Mauro Gallegati, Simone Landini and Giacomo Gallegati

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Agent Based Modelling CambridgeElements

Uploaded by

Agent Based Modelling CambridgeElements

Uploaded by

Gallegati et al.

This Element works as non-technical overview of Agent-

Cover image: Matt LaVigne/500px/

A Tool for Complexity

Cambridge University Press is part of Cambridge University Press & Assessment,

A Tool for Complexity

Elements in Complexity and Agent-Based Economics

Abstract: This Element works as non-technical overview of

Keywords: agent, networks, simulation platforms, validation, sensitivity

© Mauro Gallegati, Simone Landini and Giacomo Gallegati 2024

2 Tools for the Simulation with Models

methods of implementation, results, solutions, developments and contributions

Agent-Based Modelling is a computational approach for the study of systems

1.1 The Agent

The term Agent-Based Modeling refers to a class of modelling approaches

In general, an agent is any entity capable of acting, namely, of performing

BOX 1 THE C-ABM THEORETICAL FRAMEWORK OF TESFATSION (2021).

Based on these founding principles, an ABM becomes a computational

1.2 Interaction, Networks, and Heterogeneity

Caldarelli and Chesa, 2016) evolving, changing, and reconﬁguring. In con-

1.3 What ABM Is About

experimentally replicated (in economics as in astronomy or volcanology). Given the

A simulation is an ‘operating model’ of central features or elements of a real or

1.4 Some History

macroeconomic outcomes. Eliasson in 1977 and 1984, constructed MOSES,

Figure 1 A simulation result of Schelling’s model.

For a short history of Agent-Based Computational Economics (ACE) see

in Europe, it has been metabolized prima facie by some innovative social

Currently, ABM methodology is increasingly successful also in economics:

the agent-based models China is using now are multidisciplinary, multilevel

devoted to networks, policy and empirical veriﬁcation;7 and ﬁnally Ancona,

2 Tools for the Simulation with Models Based on Agents

• minimal learning effort to use,

• the most agile user interaction,

2.1 Some of the Mostly Diﬀused ABMS Platforms

have been developed in this environment. Currently also available is the

2.2 A Guide to the Literature on ABMS Tools

provides a high level of abstraction directed towards developing agents and

2.3 General Characteristics of an ABM

decision machine, which in its actions simulates real processes as a

Table 1 A summary diagram of the validation process

needed is a systematisation of the literature on validation, also starting from

1. The ‘veriﬁcation’ of a model is the ‘evaluation with respect to consistency’

contradictions in the implemented formal model; sometimes agent models are

In both micro- and macro-face validation, no data are directly compared

predictive. In every case, the ‘empirical output validation’ aim is to estimate if

data (simulated minimum distance method) or, as a special case, on

2.5 Sensitivity Analysis

As Morton and Tejada (2013) explain, in very general terms, sensitivity

1. Deﬁne the sensitivity analysis model.

1. Choose the outputs of interest,

ABM Agent-Based Model, Modelling

A Multiscale Model of Virus Pandemic: Heterogeneous Interactive Entities

Kirman A. P., (1999), Interaction and Markets, in Gallegati, M., and

Railsback, S. F, and Grimm, V., (2019), Agent-Based and Individual-Based

Wilensky, U., (1999–2019), Types of Agents in NetLogo, The Center for

About the Series

Elements in the Series

A full series listing is available at: www.cambridge.org/ECAE

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Cover image: Matt LaVigne/500px/