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An Agent-Based Model of Institutional Life-Cycles

Wäckerle, Manuel and Rengs, Bernhard and Radax, Wolfgang (2014) An Agent-Based Model of Institutional Life-Cycles. Games, 5 (3). pp. 160-187. ISSN 2073-4336

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Abstract

We use an agent-based model to investigate the interdependent dynamics between individual agency and emergent socioeconomic structure, leading to institutional change in a generic way. Our model simulates the emergence and exit of institutional units, understood as generic governed social structures. We show how endogenized trust and exogenously given leader authority influences institutional change, i.e., diversity in institutional life-cycles. It turns out that these governed institutions (de)structure in cyclical patterns dependent on the overall evolution of trust in the artificial society, while at the same time, influencing this evolution by supporting social learning. Simulation results indicate three scenarios of institutional life-cycles. Institutions may, (1) build up very fast and freeze the artificial society in a stable but fearful pattern (ordered system); (2) exist only for a short time, leading to a very trusty society (highly fluctuating system); and (3) structure in cyclical patterns over time and support social learning due to cumulative causation of societal trust (complex system).

Item Type: Article
Additional Information: The authors would like to highlight that initial research and previous versions of this paper were produced during a research project granted by the Oesterreichische Nationalbank (OeNB-the central bank of the Republic of Austria) within the "Jubiläumsfonds" project 13350.
Keywords: institutional economics; institutional life-cycles; agency-structure dynamics; iterated prisoners dilemma; agent-based modeling; applied game theory; evolutionary political economy; complexity
Divisions: Departments > Sozioökonomie > Ecological Economics
Version of the Document: Published
Depositing User: ePub Administrator
Date Deposited: 24 Nov 2017 10:44
Last Modified: 05 May 2018 16:54
Related URLs:
FIDES Link: https://bach.wu.ac.at/d/research/results/68103/
URI: http://epub.wu.ac.at/id/eprint/5883

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