Using Software Agents to Supplement Tests Conducted by Human Subjects

The objective of this paper is to test whether or not software agents can match the observed behavior of human subjects in laboratory tests of markets. For this purpose, one set of tests uses four software agents and two human subjects to represent six suppliers in three different market situations: no forward contracts, fixed price forward contracts, and renewable forward contracts. An identical set of tests is also conducted using software agents to represent all of the suppliers. The results show that software agents were able to replicate the behavior of human subjects effectively in the experiments. This indicates that software agents can be used effectively in testing electricity auctions, doing additional sensitivity tests, and supplementing results obtained using human subjects. Keyword: Agent-based economics, electricity auction, experimental economics JEL: C73, L94, D43.