The simulation of human behavior with avatars and agents in virtual reality (VR) has led to an explosion of training and educational research. The use of avatars (user-controlled characters) or agents (computer-controlled characters) may influence the engagements of the user experience for emergency response, and training in emergency scenarios. Our proposed collaborative VR megacity environment offers flexibility to run multiple scenarios and evacuation drills for disaster preparedness and response. Modeling such an environment is very important because in the real-time emergencies we experience in day-to-day life, there is a need for preparation to extreme events. These emergencies could be the result of fire, smoke, gunman threat, or a bomb blast in a city block. The collaborative virtual environment (CVE) can act as a platform for training and decision making for SWAT teams, fire responders, and traffic clearance personnel. The novelty of our work lies in modeling behaviors (hostile, non-hostile, selfish, leader-following) for computer-controlled agents so that they can interact with user-controlled agents in a CVE. We have used game creation as a metaphor for creating an experimental setup to study human behavior in a megacity for emergency response, decision-making strategies, and what-if scenarios. Our proposed collaborative VR environment includes both immersive and non-immersive environments. The participant can enter the CVE setup on the cloud and participate in the emergency evacuation drill, which leads to considerable cost advantages over large-scale, real-life exercises. We present two ways for controlling crowd behavior. The first defines rules for agents, and the second provides controls to the users as avatars to navigate in the VR environment as autonomous agents. Our contribution lies in our approach to combine these two approaches of behavior to perform virtual drills for emergency response and decision making.