Economic and financial markets are characterized by interactions among various entities, whose individual behaviors and decisions collectively lead to emergent phenomena that may be unapparent and unexpected. A well-known approach for developing detailed models that closely represent such dynamic and complex systems is Agent-based Modeling and Simulation (ABMS). This comprehensive review analyzes the state-of-the-art application of ABMS for economic and financial market analysis, examining over 120 studies to provide a clear understanding of its current state and future potential. The review demonstrates how simulating market behavior with agent-based models can enhance understanding of market dynamics and serve as a robust decision-support system for running “what-if” scenarios and exploring their outcomes in a virtual environment. Furthermore, it critically assesses methodological challenges and highlights future opportunities for employing ABMS to analyze economic and financial markets.
Jamali et al. (Thu,) studied this question.