Agent-Based Models of a Banking Network as an Example of a Turbulent Environment: The Deliberate vs. Emergent Strategy Debate Revisited

Few agent-based models have as yet made their way into the mainstream of management literature. This article sets out to introduce an agent-based model for studying different strategies available to banks. A model is structured that can be developed in order to give new insight into management debates, and that can give insight into the most appropriate strategies under differing environmental conditions. By using agent-based models of strategy at an abstract level, some insight can be gained to distinguish between strategies that may be appropriate and that warrant further empirical investigation, and those that do not. An agent-based model is introduced that can be used to study strategies from a bank’s perspective. It contains a network of banks and customers, where customers and banks are boundedly rational and turbulence is present within the banking environment. Banks can decide the extent to which they operate in several strategic dimensions. Strategic reviews cause a change in the positioning of the banks, which in turn causes a redistribution of their customers to competitors, which in turn feeds back to influence banks’ future strategic analysis and subsequent movement. By using an agent-based model, insights can be gained into a