Description
A model focusing on tariff in global trading could effectively demonstrate the ratchet effect
Agents: Countries and firms with varying preferences (country care more about debt/economic status; firms care more about profitability)
Environment: global trading system (could be specified to one smaller field for simplicity)
Ratchet Mechanism: Once tariffs are imposed by one country, other countries may keep imposing tariffs to counterattack, which leads to further tariff war instead of mutual negotiation.
Interesting Modeling Aspects
This example could showcase several important Mesa capabilities:
Expectation Formation: How agents form and update expectations about the action of other agents
Multi-level Ratchet Effects:
firm level (more conservative to protect from loss)
consumer level (imported goods vs. local goods)
national economy level (represented by debt ? -> needs further discussion)
Connection to Mesa Development
Agent states and transitions
Approaches for modeling perception and expectation updating
Demonstrating adaptive behavior in more complex social systems