A Review of Microsimulation and Hybrid Agent-Based Approaches

In this chapter we introduce an approach to individual based modelling of social and economic systems. Microsimulation models (MSM) appear similar to ABM through the representation of individual decision-making units, but there is a significant variation of emphasis between the two approaches. MSM are typically stochastic or rule-based, and with a strong applied policy focus. These characteristics are explored and elaborated through a number of examples. While MSM are often very rich in their representation of 'structures', ABM are usually better tuned to the analysis of 'behaviours'. We therefore argue that there is a strong logic to considering the MSM and ABM approaches as complementary and to begin a search for hybrids which might combine the best features of both approaches.