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The regulatory dilemma: an agent-based approach to policy making within innovation systems

The regulatory dilemma: an agent-based approach to policy making within innovation systems
The regulatory dilemma: an agent-based approach to policy making within innovation systems
Government regulation plays a pivotal role in influencing the innovation activities of companies, industries and whole economies. However, sound regulation must be based on an understanding of how a policy change will affect the behaviour of various actors in the market. This implies that some form of predictive modelling is necessary for intelligent policy formation. With this in mind, an ‘almost zerointelligent’ agent-based model is developed to represent typical market dynamics. The agents make price and production decisions and decide whether or not to develop or imitate a product based on a pre-defined ‘research’ and ‘imitation” ratings. The findings illustrate a Pareto Optimal line where both consumers and companies prefer the development of new products; however, different imitation rates create opposite results. Interestingly, policy changes in environments where imitation is already low, seems to cause larger impacts on the system. Furthermore, the findings also suggest that when regulation encourages imitation, improvements to consumers or companies can be made without hurting the other as much. These preliminary results set the foundation for future models that use regulation to steer the system of innovation towards these preferred outcomes.
Agent-based modelling, Zero-Intelligence, Innovation, System of Innovation, Regulation
52-63
Hughes, Christopher Mark
00ee161f-d5a7-4c11-986c-d0ff1c5f0c22
Gerding, Enrico
d9e92ee5-1a8c-4467-a689-8363e7743362
Warren, Lorraine
31ae1012-ee25-4f80-a23b-dbe811b922f1
Noble, Jason
6e8de7cc-e051-4d4f-b89c-5b5e0b2554dc
Hughes, Christopher Mark
00ee161f-d5a7-4c11-986c-d0ff1c5f0c22
Gerding, Enrico
d9e92ee5-1a8c-4467-a689-8363e7743362
Warren, Lorraine
31ae1012-ee25-4f80-a23b-dbe811b922f1
Noble, Jason
6e8de7cc-e051-4d4f-b89c-5b5e0b2554dc

Hughes, Christopher Mark, Gerding, Enrico, Warren, Lorraine and Noble, Jason (2014) The regulatory dilemma: an agent-based approach to policy making within innovation systems. In World Congress on Social Simulation. pp. 52-63 .

Record type: Conference or Workshop Item (Paper)

Abstract

Government regulation plays a pivotal role in influencing the innovation activities of companies, industries and whole economies. However, sound regulation must be based on an understanding of how a policy change will affect the behaviour of various actors in the market. This implies that some form of predictive modelling is necessary for intelligent policy formation. With this in mind, an ‘almost zerointelligent’ agent-based model is developed to represent typical market dynamics. The agents make price and production decisions and decide whether or not to develop or imitate a product based on a pre-defined ‘research’ and ‘imitation” ratings. The findings illustrate a Pareto Optimal line where both consumers and companies prefer the development of new products; however, different imitation rates create opposite results. Interestingly, policy changes in environments where imitation is already low, seems to cause larger impacts on the system. Furthermore, the findings also suggest that when regulation encourages imitation, improvements to consumers or companies can be made without hurting the other as much. These preliminary results set the foundation for future models that use regulation to steer the system of innovation towards these preferred outcomes.

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More information

Published date: 5 November 2014
Additional Information: Hughes, C., Noble, J., Warren, L. E, Gerding (2014) The Regulatory Dilemma: An Agent-based Approach to Policy Making within Innovation Systems, Proceedings of the 5th World Congress on Social Simulation, Sao Paulo, Nov 4 - 7.
Venue - Dates: 5th World Congress on Social Simulation, Brazil, 2014-11-04 - 2014-11-07
Keywords: Agent-based modelling, Zero-Intelligence, Innovation, System of Innovation, Regulation

Identifiers

Local EPrints ID: 412684
URI: http://eprints.soton.ac.uk/id/eprint/412684
PURE UUID: 78eb62e4-ba2d-4444-a1a6-a861fcdf4d5e
ORCID for Enrico Gerding: ORCID iD orcid.org/0000-0001-7200-552X

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Date deposited: 26 Jul 2017 16:30
Last modified: 03 Mar 2020 01:28

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