Understanding the Effect of IoT Adoption on the Behavior of Firms: An Agent-based Model

In the context of increasing diffusion of technologies related to Industry 4.0 and the Internet of Things in particular, we have developed an agent-based model to simulate the effect of IoT diffusion in companies and verify potential benefits and risks. The model analyses how firms react to the spread of IoT in the market by analysing its effects on firms' pricing and quality strategies, its impact on variable production costs, and the long-term survival rate of firms. The model shows how IoT diffusion has the potential to influence the market by supporting both quality and cost improvements. The results of the model also confirm the potential for significant benefits for businesses, suggesting the opportunity to support the introduction and application of IoT, and clearly show how the use of IoT can be a key strategic choice in competitive market contexts focused on cost strategies to increase business performance and prospects.