Network Averaging: a technique for determining a proxy for the dynamics of networks

Bell, William Paul (2009). Network Averaging: a technique for determining a proxy for the dynamics of networks. In: Proceedings of the 9th Asia-Pacific Complex Systems Conference. Complex ’09: the 9th Asia Pacific Complex Systems Conference, Tokyo, Japan, (). 4-7 November 2009.

Author Bell, William Paul
Title of paper Network Averaging: a technique for determining a proxy for the dynamics of networks
Conference name Complex ’09: the 9th Asia Pacific Complex Systems Conference
Conference location Tokyo, Japan
Conference dates 4-7 November 2009
Proceedings title Proceedings of the 9th Asia-Pacific Complex Systems Conference
Place of Publication Tokyo, Japan
Publisher Chuo University
Publication Year 2009
Sub-type Fully published paper
Total pages 8
Language eng
Abstract/Summary The main aim of this paper is to introduce the network averaging technique. This technique is introduced because accurately determining the structure of real networks can be difficult and the network averaging technique provides a proxy for real networks. A second aim is to introduce the adaptive interactive expectations (AIE) model, which uses a ‘pressure to change profit expectations index’ to replace the utility curve maximising agent concept. The AIE model has an interactive expectations network, which is difficult to determine, so suitable to illustrate network averaging. The AIE model is tested against the Dun and Bradstreet Profit Expectations Survey. The paper finds network averaging improves the predictive performance of AIE over its benchmarks: the rational expectations hypothesis and the adaptive expectations model. The network averaging technique could be adapted to other situations where there are endogenous effects acting through difficult to measure networks. The AIE model could be readily applied to other forms of expectations and as a replacement for the utility curve maximising agent. Finally, in this paper AIE models profit expectations, which are an important issue in their own right because they affect investment decisions and whether one business will extend credit to another business.
Keyword Agent based model
Australia
Adaptive Expectations
Interactive Expectations
Adaptive Interactive Expectations
Network averaging
Model averaging
Q-Index Code E1
Q-Index Status Provisional Code
Institutional Status UQ

Document type: Conference Paper
Collection: School of Economics Publications
 
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Created: Fri, 27 Feb 2015, 17:45:03 EST by Mr Paul Bell on behalf of School of Economics