Agent-based modelling as a tool for testing electric power market designs

Although agent-based modelling history can be traced back until the 1960's in computer sciences, the technology still slowly trickles down from theoretical abstraction to practical application. Interesting study areas have been using agent-based models to assess their research questions for a long time while other fields of study which are interesting from an agent-based technology perspective - such as management sciences - only recently recognised this technology. This paper sets an overview on the benefits and criticism of agent-based models and shows how this tool can be employed to gain better insights in complex market designs, policies and principles with respect to the more traditional tools. Especially in the field of wholesale electric power markets, agent-based models gleam as a promising market design deliberation tool anterior to the actual real world market implementation. An introduction to the latest electricity market models is given to illustrate how national and international policy makers embrace agent-based simulations as a framework to base their decisions upon.