Agent (economics)

Overview

Economics

Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...

, an

**agent**is an actor

Actor

An actor is a person who acts in a dramatic production and who works in film, television, theatre, or radio in that capacity...

and decision maker in a model

Mathematical model

A mathematical model is a description of a system using mathematical concepts and language. The process of developing a mathematical model is termed mathematical modeling. Mathematical models are used not only in the natural sciences and engineering disciplines A mathematical model is a...

. Typically, every agent makes decisions by solving a well or ill defined optimization

Optimization (mathematics)

In mathematics, computational science, or management science, mathematical optimization refers to the selection of a best element from some set of available alternatives....

/choice problem. The term

*agent*can also be seen as equivalent to

*player*

in game theory

Player (game)

A player of a game is a participant therein. The term 'player' is used with this same meaning both in game theory and in ordinary recreational games....

Game theory

Game theory is a mathematical method for analyzing calculated circumstances, such as in games, where a person’s success is based upon the choices of others...

.

For example,

*buyers*and

*sellers*are two common types of agents in partial equilibrium

Partial equilibrium

Partial equilibrium is a condition of economic equilibrium which takes into consideration only a part of the market, ceteris paribus, to attain equilibrium....

models of a single market. Macroeconomic models, especially dynamic stochastic general equilibrium

Dynamic stochastic general equilibrium

Dynamic stochastic general equilibrium modeling is a branch of applied general equilibrium theory that is influential in contemporary macroeconomics...

models that are explicitly based on microfoundations

Microfoundations

In economics, the term microfoundations refers to the microeconomic analysis of the behavior of individual agents such as households or firms that underpins a macroeconomic theory....

, often distinguish household

Household

The household is "the basic residential unit in which economic production, consumption, inheritance, child rearing, and shelter are organized and carried out"; [the household] "may or may not be synonymous with family"....

s, firms, and government

Government

Government refers to the legislators, administrators, and arbitrators in the administrative bureaucracy who control a state at a given time, and to the system of government by which they are organized...

s or central bank

Central bank

A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system of their respective countries...

s as the main types of agents in the economy.

Unanswered Questions