Cross-Over Between Scenario Analysis and Agent-Based Market Simulation for Technology Planning

Many firms resort to scenario analysis as a tool for supporting strategic technology planning. For this purpose, alternative future scenarios are set up and contrasted with potential courses of action that take into account, for instance, new product features, measures for market introduction, or novel business models. Typically, the fitting between these scenarios and potential (action) portfolios is based on estimations. Enriching this rather limited valuation with outcomes from (agent-based) market simulations may therefore serve as a valuable means for decision support, because simulation results provide much more in-depth information such as product diffusion curves based on the new technologies for each combination of scenario and (action) portfolio over the course of time. The simulation can account for the relevant stakeholders (e.g., consumers) by modeling them as agents with heterogeneous preferences and behaviors. The prospective market development then emerges from the agents' actions and interactions (e.g., their word-of-mouth communication or purchases). We will describe such an agent-based model and discuss its contribution to technology planning by means of application examples based on real-world data.