A Simulation Model of Technological Adoption with an Intelligent Agent

Abstract

Operational optimization models of technology adoptions commonly assume the existence of a social planner who knows a long-term future. Such kind of planner does not exist in reality. This paper introduces a simulation model in which an intelligent agent forms its expectation on future by continuous learning from its previous experience, and adjusts its decision on technology development continuously. Simulations with the model show that with the intelligent agent, an advanced but currently expensive technology will be adopted, but with a much slower pace than in optimization models.