Discrete Event Simulation in the Study of Energy, Natural Resources and the Environment

Abstract

The development of computer technology has made discrete event simulation (DES) an increasingly attractive method. This chapter starts with a brief survey of the important uses of DES within the Energy, Natural Resource and Environmental Economics area. The chapter then describes three examples of how the work relating to this area using DES has done, namely: (1) models of project management, where simulation models allow for more realistic assumptions of time distributions and of limited resources than standard PERT (Program Evaluation Review Technique) and CPM (Critical Path Method) methods; (2) a bidding situation for oil resources, characterized by asymmetric information; (3) a small game dealing with duopolies producing and selling homogenous goods, such as oil or coal, but where demand is stochastic.