Agent-Based Models vs Aggregate Models · Rebel Economist (Free)

Agent-Based Models vs Aggregate Models

I have recently read J Doyne Farmer's book "Making Sense of Chaos". He uses agent-based models in his descriptions of complexity economics. That seems to be a superior strategy to using aggregate models. For example, the bottom-up agent centered nature of an agent-based model might be superior from a design perspective because it can help account for how individuals interact with institutions, and what kinds of design decisions we need to make when designing institutions based on complex systems analysis. Are there any advantages to using aggregate models? Any drawbacks of agent-based models?

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