Friday, March 07, 2003

Simulation and Its Discontents, Part I

There's been an increasing amount of attention towards the use of simulation lately. Partly, this is a function of the kinds of problems we're interested in solving (climate change, military action, policy interventions, business model/pricing model changes) that aren't particularly amenable to closed-form analysis. It also has a supply-side component: the increasing availability of raw computer resources as well as more sophisticated modeling tools and techniques.

Chief among these is a particular simulation technology known as agent-based modeling, in which the model is constructed of a few hundred to a few thousand actors, each using a small number of simple rules and local information to decide on courses of action.

Simulation is an important technology, but there are a couple of challenges to successfully using simulations, and over the next few days, I want to discuss some of them.