1. Institut für Industriewirtschaftliche Forschung Stefan Kooths Eric Ringhut CEF 2001, New Haven Complex dynamics and adaptive fuzzy rule-based expectations economic simulations with GENEFER

2. Institut für Industriewirtschaftliche Forschung Stefan Kooths Eric Ringhut CEF 2001, New Haven 2 Contents What are adaptive fuzzy rule-based expectations? What is GENEFER? How does it work? (Example)

3. Institut für Industriewirtschaftliche Forschung Stefan Kooths Eric Ringhut CEF 2001, New Haven 3 Adaptive fuzzy rule- based expectations Why rule-based? humans form mental models in complex situations, simple rules Why fuzzy? uncertainty about exact functioning of a market Why adaptive? humans learn from experiences and update, drop, or form new rules What are adaptive fuzzy rule-based expectations? -What is GENEFER? -How does it work? (Example)

4. Institut für Industriewirtschaftliche Forschung Stefan Kooths Eric Ringhut CEF 2001, New Haven 4 Example IF interest rate differential between the USA and Germany is medium AND growth rate in the USA is significantly larger THEN the will continue its moderate decline against the US$ What are adaptive fuzzy rule-based expectations? -What is GENEFER? -How does it work? (Example)

5. Institut für Industriewirtschaftliche Forschung Stefan Kooths Eric Ringhut CEF 2001, New Haven 5 small large Fuzzy Terms i USA - i Ger µ 1,0 medium 0,8 0,3 0,8% What are adaptive fuzzy rule-based expectations? -What is GENEFER? -How does it work? (Example) 0,4%0,9%

6. Institut für Industriewirtschaftliche Forschung Stefan Kooths Eric Ringhut CEF 2001, New Haven 6 Fuzzy Rule–Base IF... AND...THEN... Output What are adaptive fuzzy rule-based expectations? -What is GENEFER? -How does it work? (Example) IF... AND...THEN...

7. Institut für Industriewirtschaftliche Forschung Stefan Kooths Eric Ringhut CEF 2001, New Haven 7 Learning (1)adapt fuzzy set widths and centers What are adaptive fuzzy rule-based expectations? -What is GENEFER? -How does it work? (Example) w1w1 IFANDTHEN w2w2 IFANDTHEN w3w3 IFANDTHEN w4w4 IFANDTHEN w5w5 IFANDTHEN w6w6 IFANDTHEN w7w7 IFANDTHEN (1) (2) (3) (2)forget unused rules (3)search for new rules

8. Institut für Industriewirtschaftliche Forschung Stefan Kooths Eric Ringhut CEF 2001, New Haven 8 GENEFER universal tool for designing, managing and analyzing fuzzy Rule–Bases expectation generator for economic simulations via COM-Interface forecast manager for empirical data -What are adaptive fuzzy rule-based expectations? What is GENEFER? -How does it work? (Example)

9. Institut für Industriewirtschaftliche Forschung Stefan Kooths Eric Ringhut CEF 2001, New Haven 9 www..de -What are adaptive fuzzy rule-based expectations? -What is GENEFER? How does it work? (Example)