Business Applications and Research Questions Using Spatial Agent-Based Models

Abstract

Agent-based models (ABMs) provide a natural representation of large markets with many consumers interacting. As a result, business applications of these tools can provide powerful insights in to complex problems. When spatial and geographic modeling is added as well, these insights gain the ability to be transported to the real world, where challenging questions can be addressed. Most of the work that has been done in this area focuses on two different levels of spatial models: (1) the regional or macro-level, and (2) the small-scale or micro-level. Macro-level spatial ABMs are models which address the movement of individuals and the location of facilities across an entire region, such as spatial retail decisions, residential housing choices, or geographically extended supply chains. Micro-level spatial ABMs examine the movement of individuals within a constrained physical space, such as pedestrian modeling in a neighborhood, or consumer modeling within a retail location. We will discuss each of these levels of detail in turn and finish by discussing future applications of spatial ABMs to business.

Keywords: business applications, retail, market models, agent-based modeling, spatial models, GIS