Simulation for Data Science with R

Summary

The basic concept of system dynamics is to predict time based on given scenarios/assumptions.

We looked at simple applications for population demographics using microsimulation modeling. Microsimulation modeling became popular since managers and politicians wanted to have predictions of the future. While this was done in the past with aggregated information, with agent-based microsimulation models we do it on an individual level. A criticism of this is that statistical uncertainty is not taken into account and that selected scenarios are unlikely to be true in the future since political changes or unobservable events may happen that cannot be considered beforehand.

Dynamic systems are popular in business and finance but they also play a ...