I n recent years, agent-based modeling has gained popularity in many scientific areas as a modeling tool capable of capturing the dynamics that arise from the interactions between individuals (e.g, Gilbert and Troitzsch, 2005). The perspective of this method, rooted in complexity theory, is that phenomena at the macro—or aggregated—level can be understood as emerging from interactions between individuals at the micro level. On their turn, these macro phenomena affect the behavioral context at the micro level, a process referred to as downward causation (e.g., Emmeche, K ppe, and Stjernfelt, 2000). Especially in the field of innovations, agent-based modeling offers a promising methodology, since interactions between large populations of consumers, groups of competing and collaborating firms and businesses, and between firms and consumers are relevant in most markets (e.g., Garcia, 2005; Gilbert, Jager, Deffuant, and Adjali, 2007). In particular, innovation diffusion is a phenomenon where interactions at the micro level between adopters and influencers are of critical importance. From the initial introduction of a new product or service, where involved consumers may spread information on product characteristics, to later stages where norms may evolve and support the further diffusion of the product/service in the market, social interactions play a pivotal role in the success (or failure) of the new product or service. It is the overall rate of diffusion at the macro level that is the major concern of many organizations, but macro-level outcomes emerging from adopter interactions at the micro level are not always predictable. Due to the interesting phenomena of feedbacks, a coincidental choice by a small group of adopting agents may cause an avalanche of successive interactions, giving rise to self-amplifying effects (nonlinear behavior) that cannot be predicted from detailed adoption data. Examples of this occurring include fads, fashions, and network externalities where the number of adopters exponentially improves consumer satisfaction (e.g., Janssen and Jager, 2001). Lack of predictability in knowing which products will take off and which will languish confronts managers with a challenge: how to capture the complex nature of innovation diffusion? What can be learned from interactions at the micro level that can help explain, manage, and sometimes predict processes at the macro level? This special issue demonstrates how agent-based modeling can be a tool for capturing micro-level individuals’ underlying decision processes and mimicking dynamic social effects observed at the macro level in the marketplace. Criticisms have arisen about agent-based models (ABM) as being ‘‘toy models’’ and unrepresentative of real phenomena. A goal of this special issue is to demonstrate that agent-based models can and should be grounded within a real market issue to go beyond the level of toy models. Ultimately, the value of agentbased simulation models, both for practitioners and for management science, resides in their capacity to contribute to our understanding and management of real markets. After an extensive review process, we selected five papers that we felt help to further develop the agent-based modeling methodology by incorporating real market research questions regarding the diffusion of innovations. Broekhuizen, Delre, and Torres focus on how social influences in the motion picture industry cause market inequalities between different countries with respect to the success of new movie releases; Zhang (Tao) and Nuttall provide a model to simulate the diffusion of smart electricity meters in Great Britain as a function of different policy options; Ahrweiler, Pyka, and Gilbert study the dynamics of innovation networks in knowledgeintensive industries and reveal how the presence of universities in such networks contributes to the quantity and speed of innovation; van Eck, Jager, and Leeflang investigate the role of opinion leaders in the diffusion of an online gaming community of children; and Zhang (Ting), Gensler, and Garcia investigate consumer adoption of alternative fuel vehicles in the Address correspondence to: Dr. Wander Jager, Associate Professor of Marketing, Faculty of Economics and Business, Nettelbosje 29747 AE Groningen, The Netherlands. E-mail: W.Jager@rug.nl.