Agent-Based Modeling vs. Equation-Based Modeling: A Case Study and Users’ Guide

In many domains, agent-based system modeling competes with equation-based approaches that identify system variables and evaluate or integrate sets of equations relating these variables. The distinction has been of great interest in a project that applies agent-based modeling to industrial supply networks, since virtually all computer-based modeling of such networks up to this point has used system dynamics, an approach based on ordinary differential equations (ODE’s). This paper summarizes the domain of supply networks and illustrates how they can be modeled both with agents and with equations. It summarizes the similarities and differences of these two classes of models, and develops criteria for selecting one or the other approach.