An Agent-based Model to Study the Evolution of Service Systems through the Service Life Cycle

Abstract

We introduce a unified concept of service life cycle (SLC) for the study of service system evolution. The need for this research arises from the fact that studying service ecosystems has become a critical need in the modern service economy. Adopting the view that a service ecosystem is a complex adaptive system of interacting service systems, we propose Agentbased Modeling methodology as a potential candidate for service research. Our agent-based model simulates an artificial market, in which one hypothetical service is being offered and customer agents interact with service provider agents to co-create value. The design of the model takes inputs from the service dominant logic, Kauffman’s NKCS model and the ISPAR model of service system interactions. The simulation results reveal that the evolution of service providers follows a life cycle pattern, which we call the Service Life Cycle. We propose the SLC to be used as a reference to evaluate the performance of service providers in a service ecosystem, initiating a novel S-D logic based discussion on sustainability of business firms.