<p>I would say applications of RL in economics are still in their infancy, though probably have applications in many state-based models, agent-based models, or fields with repeated interactions like game theory.</p>
<p>There has been some work done on what you might call the &quot;microfoundations&quot; part - which is studying &quot;regret&quot;. Susan Athey, for example, does a lot of work in this space, and an example paper is &quot;Policy Learning with Observational Data&quot; found here: <a href="https://arxiv.org/abs/1702.02896" rel="noreferrer">https://arxiv.org/abs/1702.02896</a></p>
<p>There are also some papers that shoes RL results converge to what one might obtain via rational expectations / equilibrium. For example, &quot;Learning leads to bounded rationality and the evolution of cognitive bias in public goods games&quot; by Leimar, O. &amp; McNamara, J. M.</p>

CC BY-SA 4.0
2021-03-05T06:41:54.240Z
Thanks! Ill read that papers. To me it looks like RL is quite a low hanging fruit in economic research...
Nikolai Kl
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2021-03-05T03:29:02.080Z
2021-03-05T03:29:02.080Z
qwerty
<p>Given the set-up of the problem in reinforcement learning there is also a relatively close link with evolutionary stable strategies in game theory. Granted evolutionary game theory is not economics per se, but there are overlaps.</p>
<p>See for example <a href="https://www.jstor.org/stable/20118420?seq=1" rel="nofollow noreferrer">this paper</a> by Tuyls et al. on the relation between multi agent systems, reinforcement learning and evolutionary game theory</p>

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2021-03-05T13:19:36.507Z
2021-03-05T13:19:36.507Z
Maarten Punt
<p>While working on different research projects I got fascinated by RL which got applied to many fields that are focused on agent based modeling. Though it is a field in Machine Learning what interests me is the overlap between that apporach with problems in economics. The latest awesome paper I know is the &quot;AI Economist&quot; by <a href="https://arxiv.org/abs/2004.13332" rel="nofollow noreferrer">Socher et al.</a>. Do you know more fields/papers where RL is applied to economic decision making? And do you think that this approach can lead to a paradigm shift in economics ?</p>

<game-theory>
The role of reinforcement learning in Economics
Nikolai Kl
# The role of reinforcement learning in Economics

(Asked by: username_0 on 2021-03-02)

While working on different research projects I got fascinated by RL which got applied to many fields that are focused on agent based modeling. Though it is a field in Machine Learning what interests me is the overlap between that apporach with problems in economics. The latest awesome paper I know is the "AI Economist" by [Socher et al.](https://arxiv.org/abs/2004.13332). Do you know more fields/papers where RL is applied to economic decision making? And do you think that this approach can lead to a paradigm shift in economics ?

**Tags:** game-theory


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## 2 answers

### Answer by username_1 on 2021-03-05. Score: 5

I would say applications of RL in economics are still in their infancy, though probably have applications in many state-based models, agent-based models, or fields with repeated interactions like game theory.

There has been some work done on what you might call the "microfoundations" part - which is studying "regret". Susan Athey, for example, does a lot of work in this space, and an example paper is "Policy Learning with Observational Data" found here: <https://arxiv.org/abs/1702.02896>

There are also some papers that shoes RL results converge to what one might obtain via rational expectations / equilibrium. For example, "Learning leads to bounded rationality and the evolution of cognitive bias in public goods games" by Leimar, O. & McNamara, J. M.

> **Comments:**
> **username_0**: Thanks! Ill read that papers. To me it looks like RL is quite a low hanging fruit in economic research...  

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### Answer by username_2 on 2021-03-05. Score: 2

Given the set-up of the problem in reinforcement learning there is also a relatively close link with evolutionary stable strategies in game theory. Granted evolutionary game theory is not economics per se, but there are overlaps.

See for example [this paper](https://www.jstor.org/stable/20118420?seq=1) by Tuyls et al. on the relation between multi agent systems, reinforcement learning and evolutionary game theory


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