Micro-simulation of Markets

Abstract

This paper attempts to give an integrated presentation of the application of micro-simulation to the study of markets, based on the purchase behaviour of individual consumers. We emphasize the methodological considerations which should govern the use of the approach, and in particular the need for evolutionary model-building; the technical problems which are only rarely specified in the literature; and the need to be eclectic in the selection of sub-model formulations. Case-studies are reported, and information is given on the scale of resources required for such projects. The presentation is backed with full references to relevant published work, to provide a practical aid to workers in the field. Much of the discussion is also relevant to the simulation of social systems other than markets.