Modeling Qualitative Development

Abstract

This chapter introduces agent-based modeling as a methodology to study qualitative change in economic systems. The need to focus on qualitative developments is derived from evolutionary economics, where the quantitative orientation of mainstream economic approaches is strongly criticized. It is shown that agent-based models can cope with the challenges of an evolutionary setting and fulfill the requirements of modeling qualitative change. In particular agent-based models allow a detailed representation of knowledge and the underlying dynamics, which are considered the major driving force of economic growth and development. The chapter also gives an illustrative example of an agent-based model of innovation processes organized in networks of actors.