Knowledge Diffusion and Innovation

Knowledge Diffusion and Innovation

Modelling Complex Entrepreneurial Behaviours

Piergiuseppe Morone and Richard Taylor

Modern economies are described as ‘knowledge based’. This book investigates the meaning of such a statement, assessing the relevance of knowledge and the channels through which knowledge is exchanged, both from a theoretical and an empirical perspective.

Chapter 6: Theoretical and Applied Methodologies of Agent-based Models

Piergiuseppe Morone and Richard Taylor

Subjects: economics and finance, economics of innovation, evolutionary economics, innovation and technology, economics of innovation


The objective of this chapter is to discuss the approaches of applied and theoretical modelling, to emphasize differences in the nature of modelling enquiry and to suggest that these differences – axioms of modelling methodology – should be recognized as starting points that determine the way the enquiry is planned, carried out and evaluated by modellers. This is followed by a closely related discussion of validation of agent-based models. Here, validation is considered quite broadly, encompassing both inputs and outputs to the modelling as well as its incorporation into all stages of the model building and analysis. It draws on a diverse review of literature from computer science perspectives, from sociology and economics, and from applied agent-based models. This discussion will pave the way to the study conducted in the following chapter. The objective is to place the applied model presented in Chapter 7 within the methodological framework introduced, and to give the reader some context for this book outside the specific domain of knowledge and innovation. THEORETICAL AND APPLIED MODELLING Broadly speaking there are two streams of investigation that are possible to classify usefully. The first type of enquiry, referred to as foundational agent-based social simulation (Moss 2001), is concerned with the formulation and verification of social theory and the design of agent architectures. Some of the most striking findings about the dynamics of agent-based models were achieved with early foundational models like Schelling’s segregation model (Schelling 104 Theoretical and applied methodologies of agent-based models 105 1978), the Santa Fe Artificial...

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