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Demand function and its role in a business simulator

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  • Vymetal, Dominik
  • Ježek, Filip

Abstract

Business simulations are useful tools due to the fact that it eases management decision making. No doubt there are many processes which must be considered and simulated. Therefore, such business simulator is often composed of many processes and contains many agents and interrelations as well. Since the business simulator based on multi-agent system is characterized by many interrelations within, this article deals with a specific part of the business simulator only – a demand function and its modeling. The aim of this partial research is to suggest demand function which would be most suitable for the business simulation. In this paper a new approach for customer decision function in business process simulation was presented. The decision of the customer is based on Marshallian demand function and customer utility function using Cobb-Douglas preferences. The results obtained by means of the MAREA simulation environment proved that this approach yields correct simulation results.

Suggested Citation

  • Vymetal, Dominik & Ježek, Filip, 2014. "Demand function and its role in a business simulator," MPRA Paper 54716, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:54716
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    References listed on IDEAS

    as
    1. Barnett, William A. & Serletis, Apostolos, 2008. "Consumer preferences and demand systems," Journal of Econometrics, Elsevier, vol. 147(2), pages 210-224, December.
    2. Barnett, William A. & Serletis, Apostolos, 2008. "Measuring Consumer Preferences and Estimating Demand Systems," MPRA Paper 12318, University Library of Munich, Germany.
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    Cited by:

    1. Sohei Ito & Dominik Vymětal & Roman Šperka & Michal Halaška, 2018. "Process mining of a multi-agent business simulator," Computational and Mathematical Organization Theory, Springer, vol. 24(4), pages 500-531, December.
    2. Dominik Vymetal & Sohei Ito, 2016. "The Formalization of a Generic Trading Company Model Using Software Agents as Active Elements," Working Papers 0029, Silesian University, School of Business Administration.

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    More about this item

    Keywords

    business simulator; multi-agent system; demand function; MAREA;
    All these keywords.

    JEL classification:

    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • C88 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Other Computer Software
    • D4 - Microeconomics - - Market Structure, Pricing, and Design

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