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Agent-based strategizing
Strategic management is a system of continual disequilibrium, with firms in a continual struggle for competitive advantage and relative fitness. Models that are dynamic in nature are required if we are to really understand the complex notion of sustainable competitive advantage. And new tools are required to tackle challenges of how firms should compete in environments characterized by both exogeneous shocks and intense endogenous competition. A rich history of alternative dynamic models exist in other social and natural sciences, some of which have been incorporated into the strategic management literature, notably the NK series of models. Yet there is a whole history of models from systems models, organizational ecology,
and general fitness landscape models that can be converted to agent-based models and used for the study of strategic management. Agent-based modelling of firms’ strategies offers an alternative analytical approach, where individual firm or component parts of a firm are modelled, each with their own strategy. Where traditional models can assume homogeneity of actors, agent-based models simulate each firm individually. This allows experimentation of strategic moves, which is particularly important where reactions to strategic moves are non-trivial. This Element introduces agent-based models and their use within management, reviews the influential NK suite of models, and offers an agenda for the development of agent-based models in strategic management.
History
School
- Business and Economics
Department
- Business
Published in
Cambridge ElementsCitation
ROBERTSON, D.A., 2019. Agent-based strategizing (Elements in Business Strategy). Cambridge: Cambridge University Press. doi:10.1017/9781108767835.Publisher
Cambridge University Press © Duncan A. RobertsonVersion
- AM (Accepted Manuscript)
Acceptance date
2018-12-24Publication date
2019Notes
This paper is closed access.ISBN
9781108767835ISSN
2515-0685eISSN
2515-0693Publisher version
Language
- en