STREAM 2 AGENT-BASED MODELING OF INDUSTRIAL ECO-SYSTEMS Nigel Gilbert Ozge Dilaver Kalkan Jessica Rowden

The Task Building a generic, multi-level model of industrial eco- systems (IE). The model should:  make meaningful contributions to computational social science  be able to integrate the case study findings as they become available.

General Approach  To focus on human side of industrial eco-systems  To develop theoretical background and conceptual frameworks as we go  To build the model in small parts that produce meaningful simulation experiments

Modular Agent-based Model  The aim is to develop a generic, flexible, multi-level model of IE in parts that produce meaningful contributions to computational social science.  Basic architecture involves 3 modules and different levels of details  The general idea is to make use of well established modeling approaches for each module.

Construct: Human side of IE There are three main aspects of the human side of industrial eco-systems. This is also the main structure of our agent-based model.

Module One: Incentives The aim is to investigate emergence of by-product markets (which is important for industrial symbiosis) under different conditions. The zero-intelligence traders (Gode and Sunder, 1993) approach is used in this module. Agents with very limited capabilities are designed and simple learning capabilities are added gradually. A related study that aims to deconstruct and analyse Gode and Sunder’s original work is also being done with Ermanno Catullo, from University of Turin (visiting CRESS researcher). Price convergence and other emergent properties are used as indicators for emergence of markets.

Idea: Lack of Scarcity Hypothesis Standard Market PlotThe Lack of Scarcity Case In the case of many waste resources, there is a clear owner of the resource (unlike free goods) but the resource is not scarce. If that is the case, even though the waste resource has some use-value, potential traders may fail to co-ordinate on a positive market price.

Module Two: Learning  The aim is to represent learning and innovation in IE with a multi-level approach, relating individual learning to knowledge bases of organizations and networks  A genetic algorithm approach is used for this module.  An extended SKIN (Simulating Knowledge Dynamics in Innovation Networks, Gilbert et al, 2001) model called SKIN by Actors is developed in collaboration with colleagues from Manchester University.

Construct: Innovation in IE

Model: SKIN by Actors  A multi-level SKIN model  A firm’s knowledge base develops as a sum and summary of its employees’ knowledge.  The model also incorporates intentionality of firms in their innovative activities.  Developed in collaboration with Mercedes Bleda and Elvira Uyarra from Manchester, presented in the first SKIN Workshop in Koblenz in March.

Module Three: Relationships  The aim is to understand and represent the connections between individuals in an IE, combining analyses of social networks and institutions.  The main modeling approach will be determined in later stages for establishing a better link with the case study results.  A general model of institutional evolution is being developed for preparation and as a contribution to new institutional economics literature. A working paper will be presented in ESNIE 2011 this week.  A multi-level agent-based model of leadership is also being developed.

A multi-level ABM of Leadership  The aims is to write a publication on modelling the effect of leadership on parliamentary elections.  The model will investigate the use of stochastic continuation and data assimilation techniques for the leadership model  The model will then be used to investigate the effect of leaders and leadership on the South Humber Bank.

Outline of Progress Theoretical BackgroundIdeas, concepts, theoriesAgent-based Modeling Review of IE modelsIdentifying alternative research directions Toy model Critical review of IE literature A construct for the human side of IE The modular modeling approach Review of emergence of markets literature Lack of scarcity hypothesisABM of emergence of by- product markets Review of innovation studies literature A construct for learning and innovation in IE An extended SKIN model called SKIN by Actors Review of new institutional economics literature Evolution of markets as institution systems A general multi-level model of evolution of institutions Review of leadership literature Using stochastic continuation and data assimilation An ABM of leadership Empirical Analysis Narrative analysis of NISP case studies (with Amy Woodward) Expected outcome: typologies of IS in the UK Well-informed scenarios in ABM experiments

Thank you...