Neural Network-Based Parameter Estimation of a Labour Market Agent-Based Model

Agent-based modelling (ABM) is a widespread approach to simulate complex systems. Advancements in computational processing and storage have facilitated the adoption of ABMs across many fields; however, ABMs face challenges that limit their use as decision-support tools. A significant issue is parameter estimation in large-scale ABMs, particularly due to computational constraints on exploring the parameter space. This study evaluates a state-of-the-art simulation-based inference (SBI) framework that uses neural networks (NN) for parameter estimation. This framework is applied to an established labour market ABM based on job transition networks. The ABM is initiated with synthetic datasets and the real U.S. labour market. Next, we compare the effectiveness of summary statistics derived from a list of statistical measures with that learned by an embedded NN. The results demonstrate that the NN-based approach recovers the original parameters when evaluating posterior distributions across various dataset scales and improves efficiency compared to traditional Bayesian methods.

Automatic Differentiation of Agent-Based Models

Agent-based models (ABMs) simulate complex systems by capturing the bottom-up interactions of individual agents comprising the system. Many complex systems of interest, such as epidemics or financial markets, involve thousands or even millions of agents. Consequently, ABMs often become computationally demanding and rely on the calibration of numerous free parameters, which has significantly hindered their widespread adoption. In this paper, we demonstrate that automatic differentiation (AD) techniques can effectively alleviate these computational burdens. By applying AD to ABMs, the gradients of the simulator become readily available, greatly facilitating essential tasks such as calibration and sensitivity analysis. Specifically, we show how AD enables variational inference (VI) techniques for efficient parameter calibration. Our experiments demonstrate substantial performance improvements and computational savings using VI on three prominent ABMs: Axtell's model of firms; Sugarscape; and the SIR epidemiological model. Our approach thus significantly enhances the practicality and scalability of ABMs for studying complex systems.