Management decision support using long-term market simulation

In recent years Agent-based Computational Economics (ACE) has become an increasingly important method in market simulation. After liberalization of many former governmental owned or controlled industries the used operations research models are not longer sufficient to simulate market behavior due to individual action and increasing competition. Agent- based simulation appears to be an alternative approach considering also individual behavior and competition. Some short-term simulation approaches have shown promising results for the simulation in the domain of electricity markets. Picking up the desire for a long-term oriented simulation, this paper presents a basic agent-based model considering the investment decision within long-term planning of electricity markets. Additionally, regulatory agents are introduced as a third side in the market simulation to represent governmental decisions. This results in the definition of three types of agents representing electricity generating companies, consumers and governmental instances