I have spent the last several months adapting Epstein and Axtell's Sugarscape to include production and exchange. These are guided by heuristics that consider the state of particular local elements as compared to the maximization of scalar utility. The model generates equilibrium prices as defined by the ratio of consumption rates of each good.
The Walrasian paradigm has dominated economic analysis for greater than a century. Its dependence on the assumption of utility maximization, where utility is a scalar, has made the Walrasian framework a tractable medium for analysis. It has also limited the degree of realism present within such economic models. Agent-based modeling offers a new medium through which economists can apply and present their theories. This new method represents an opportunity for economists to reconsider the composition of agent rationality. With these models, economists may employ agents whose decisions are not relegated to the calculus of utility maximization, but, rather, whose rationality relies on the values and arrangements of local objects.
