Modeling Strategic and Operational Decision-making – an Agent-based Model of Electricity Producers

Essential steps in building agent-based models is to conceptualize, quantitatively representing and implementing the behavior of agents. A formal approach is presented to model the behavior of consumers, institutions or companies as rational decision-makers. Key element is a generic ontology for socio-technical systems and a framework for conceptualizing actors as agents with strategic, tactic and operational behavior. The approach was used to represent the behavior of electricity producers who must decide on investments, day-to-day operations and deal with CO2 emission-rights. This exercise amply demonstrates the value of using a formal conceptual framework in the development of agent-based models.