Validation in agent-based models: An investigation on the CATS model

In this paper we deal with some validation experiments on the complex adaptive trivial system (CATS) model proposed in Gallegati et al. [Gallegati, M., Giulioni, G., Palestrini, A., Delli Gatti, D., 2003a. Financial fragility, patterns of firms' entry and exit and aggregate dynamics. Journal of Economic Behavior and Organization 51, 79-97; Gallegati, M., Delli Gatti, D., Di Guilmi, C., Gaffeo, E., Giulioni, G., Palestrini, A., 2005. A new approach to business fluctuations: heterogeneous interacting agents, scaling laws and financial fragility. Journal of Economic Behavior and Organization 56, 489-512]. In particular starting from a sample of Italian firms included in the AIDA database, we perform several ex post validation experiments over the simulation period 1996-2001. In the experiments, the model parameters have been estimated using actual data and the initial set up consists of a sample of agents in 1996. The CATS model is then simulated over the period 1996-2001. Using alternative validation techniques, the simulations' results are ex post validated respect to the actual data. (C) 2007 Elsevier B.V. All rights reserved.