Effects of Trade Environment in Decentralized Inter-Organizational Business Structures Through Agent Simulation

Abstract

The objective of this research is to investigate the features of an inter-firm trade structure model. We have developed this model through agent-based simulation. In order to adapt to rapid changes in the business market, each firm must deal with changes in requirements and the required volume changes. Thus, the model has two combined functions. The first function allows a firm to freely trade with other firms as a decentralized trade structure. The second function allows a firm to mediate other firms as a centralized trade structure. The combined model has worked well in various test cases so far. However, other trading environments have not been fully investigated. Therefore, this study focuses on the detailed environmental conditions: (1) the number of similar firms and (2) the number of procurement items, and deals with intensive experiments and detailed analysis of the two functions of the model in the agent-based simulations. The simulation results suggest that the two functions in the combined model work particularly well under the conditions of a trading environment in which there exist both (1) a large number of similar business firms and (2) firms with a certain number of procurement items, compared to the decentralized trade structure, where each firm’s size is neither particularly large nor small.