Journal on Policy and Complex Systems
and social factors are interrelated . Advanced technology and compressing potential social space speed development processes . The sensitivity analysis provides more explanatory power to economic development . The number of individual interactions is critical to development . The more people interact with each other , the more value they can potentially create . However , besides the quantity of individual interactions , what matters most is the individual agent ’ s strategic choice when they play socio-economic transaction games . Cooperation does pay higher social dividends on average . Individual ’ s mutual cooperative behavior creates trust among each other , which enhances both political stability and economic growth . Defective strategy reduces social wealth , in addition to its negative impact to the level of trust in the society . Macrolevel variables also feed back to individual agents updating their attributes and change the pace and tempo of socio-economic transactions , which reinforce national development and economic growth . Incorporating the micro level with the macro level increases the model fit by doubling that of the baseline model in which only macro inputs are taken into account . The simulation result of China ’ s development trajectory from 1960 to 1980 matches reality , further confirming that individual interactions are the driver for changes at the macro level , and the macro-environment shapes individual strategy choice . The result suggests that the improved education level impacts fertility decision and strategy choice , which results in change in individual wealth as well as aggregated wealth , thus enhancing technology development and individual interaction , providing more opportunity for value creation .
This multilevel simulation model creates a baseline for current policy efforts , showing when sustainable development and growth are likely to occur . The strength of the agent-based model is its ability of modeling interactions between individual agents and the environment , as well as emergent behavior and complexity of the entire system . A key benefit is to understand how macrostructural environments change and constrain or incent individuals ’ micro-level behaviors , and how micro interactions shape macro structures . Policy can then be tested compared to baseline outcomes , under normal and crisis scenarios , to assist in robust policy development .
References
Abdollahian , M ., & Kang , K . ( 2008 ). In search of structure : the nonlinear dynamics of power transitions . International Interactions , 34 ( 4 ), 333 – 357 .
Abdollahian , M ., Kugler , J ., Nicholson , B ., & Oh , H . ( 2010 ). Politics and power . In A . Kott & G . Citrenbaum ( Eds .), Estimating impact ( pp . 43 – 90 ). New York , NY : Springer Science & Business Media .
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