Agent‐based modelling of customer behaviour in the telecoms and media markets

Abstract

Agent‐based modelling is a bottom‐up approach to understanding systems which provides a powerful tool for analysing complex, non‐linear markets. The method involves creating artificial agents designed to mimic the attributes and behaviours of their real‐world counterparts. The system’s macro‐observable properties emerge as a consequence of these attributes and behaviours and the interactions between them. The simulation output may be potentially used for explanatory, exploratory and predictive purposes. The aim of this paper is to introduce the reader to some of the basic concepts and methods behind agent‐based modelling and to present some recent business applications of these tools, including work in the telecoms and media markets.