Agent-based modelling and simulation for circular business model experimentation
Publication - December 2021
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The viability of novel network-level circular business models (CBMs) is heavily debated. Many companies are hesitant to implement CBMs in their daily practice due to various roles, stakes, opinions, and the resulting uncertainties. Testing novel CBMs before implementation is crucial.
Testing CBMs
While some scholars have used digital simulation models to test business model elements, this has not been systematically done for CBMs. To address this gap, this paper presents a systematic, iterative method to explore and improve CBMs before actual implementation using agent-based modelling and simulation.
Using an Agent-based Model
An agent-based model (ABM) was co-created with case study participants in three Industrial Symbiosis networks. The ABM was used to simulate and explore the viability effects of two CBMs in different scenarios.
Results and Findings
The simulation results indicate which CBM, combined with which scenario, led to the highest network survival rate and the highest value captured. The study also explored the influence of design options and established a design correlated with the highest CBM viability.
Improving CBM design
Based on these findings, concrete proposals were made to improve CBM design from company to network level. This study contributes to the development of systematic CBM experimentation methods. The novel approach demonstrates that agent-based modelling and simulation is a powerful method to study and improve circular business models prior to implementation.
Authors
- Kasper Lange
- Gijsbert Korevaar
- Inge Oskam
- Igor Nikolic
- Paulien Herder
Circular Design and Business research group
Designing products circularly, with the highest possible quality, and reusing discarded products and materials is the focus of the Circular Design and Business research group. The research group is investigating which new ways of designing and producing products, and doing business best fit this purpose.