The Sky is the Limit: Assessing Aircraft Market Diffusion with Agent-Based Modeling
FCN Working Paper No. 16/2019
33 Pages Posted: 2 Feb 2020
Date Written: October 1, 2019
This paper presents an adapted agent-based model for the diffusion of new aircraft model series. Expanding on the classical economic decision framework, where investment decision-making is entirely based on profitability, our holistic modeling approach takes into account profitability, flexibility, as well as the environmental impact of new aircraft model series in the adoption decision process. Technical parameters such as the range and maximum take-off weight of an aircraft model series, various emissions of the aircraft engine, as well as daily operational data, are used to calibrate the model. In validation, our model produces results that are comparable to data on the market diffusion of an existing aircraft model series, the Boeing 737-500. This result shows the applicability of our model, which can also subsequently be used on aircraft with new generations of technologies. Our simulation shows that a price reduction or a decrease in emissions could lead to more adoption and faster diffusion. Furthermore, our modeling approach demonstrates that a holistic framework to include not only profitability but also flexibility and environmental impact can be helpful when modeling the investment decision-making process.
Keywords: Transportation economics, Technological diffusion, Agent-based modeling, Aircraft
JEL Classification: C32, C63, L93, O33, Q53, Q55, R41
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