Policy Diffusion in The Beer Game

The research studies the classic beer game simulation model from a new perspective. It does so by providing each agent with two ordering policies, and creating a set of rules that allow an agent to change its policy. Such a change is triggered based on an agent's confidence in their own performance, and on the relative confidence of their nearest neighbour. The overall effect is that policy diffusion can occur, where, under certain circumstances, an agent will mimic the behaviour of its neighbour, if it believes that its neighbour is performing better. The motivation behind this research is to provide an experimental base upon which the decision making strategies of business agent can be studied.