Model thinking lecture note (1)

(1) Agent based model

this model includes 3 parts :

first :agent . This can be individual , firms. 

behaviours : how agents behave , in schelling's model that means the threshold of the people to move out.

outcome: how's the result

(2)Peer effect

It's helpful when we want some people to join the activity. It contains 6 elements:

First: quality Q.

Second: epsilon.

Third: threshold.

Forth: Peer effect X.

Fifth: Celebrity.

Sixth: Group.

signal = [Q - epsilon, Q + epsilon]; If the threshold is in the signal range, The high threshold part people will do the activity. If that part is higher than X, then all the  people will do this activity. 

Celebrity means the people who will affect other people most. 

Group means that while some members in the group, they tend to do the same things as the other members in this group.