An example visualization showing the simulated environment and the agents within it.

Dates

2009

Collaborators

Casey Nugent

Tags

multi-agent system, simulation, bank, loan, bubble

Multi-agent Simulation of the 2008 Housing Bubble

Agent-based simulation and visualization of economic bubbles used to explore the 2008 housing market bubble.

Proposal, Report

This project, my team designed a model of a the relationships between banks, borrowers, and the Federal Reserve (“Fed”) that maximizes social welfare and minimizes involvement of the Fed all the while avoiding a catastrophe similar to the real-world 2007 subprime mortgage crisis that resulted in the to-date failure of over 130 banks.

Agent Design

Our model utilizes three types of agents: borrowers, banks, and the Federal Reserve.  While borrowers and banks engage in negotiations, banks and the Fed engage in behavior monitoring and regulation.  Whether or not to make behavior adjustments will be based upon changes in the moving averages of relevant variables.