Advertisement

Impacts on Stability of Interdependencies Between Markets in a Cobweb Model

  • Emma Jonson
  • Liv Lundberg
  • Kristian Lindgren
Conference paper
Part of the Lecture Notes in Economics and Mathematical Systems book series (LNE, volume 676)

Abstract

We present a cobweb model of interdependent markets on both the supply and demand sides and apply it to a food and bioenergy framework. The supply side is represented by an agent based model of global land use while the consumer side consists of interlinked demand functions. We find that the two kinds of interdependencies have opposing effects. Linking markets on the supply side transfers instabilities within the system and may cause price fluctuations in previously stable markets. Market interdependency on the demand side, on the other hand, has a stabilizing effect.

Keywords

Supply Side Demand Side Agent Base Model Crop Type Extensive Production 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Notes

Acknowledgements

Financial support from the Swedish Energy Agency and from the EU-FP7 project MatheMACS is gratefully acknowledged.

References

  1. Anufriev M, Hommes C, Makarewicz T (2013) Learning-to-forecast with genetic algorithms. Technical report, working paperGoogle Scholar
  2. Brock WA, Hommes CH (1997) A rational route to randomness. Econ J Econ Soc 65(5):1059–1095Google Scholar
  3. Bryngelsson DK, Lindgren K (2012) A conceptual partial equilibrium model of global agricultural land-use. Working paper. Available at http://publications.lib.chalmers.se/records/fulltext/local_164501.pdf
  4. Bryngelsson DK, Lindgren K (2013) Why large-scale bioenergy production on marginal land is unfeasible: a conceptual partial equilibrium analysis. Energy Policy 55:454–466CrossRefGoogle Scholar
  5. Currie M, Kubin I (1995) Non-linearities and partial analysis. Econ Lett 49(1):27–31CrossRefGoogle Scholar
  6. Dieci R, Westerhoff F (2010) Interacting cobweb markets. J Econ Behav Organ 75(3):461–481CrossRefGoogle Scholar
  7. Ezekiel M (1938) The Cobweb theorem. Q J Econ 52:255–280CrossRefGoogle Scholar
  8. Fargione J, Hill J, Tilman D, Polasky S, Hawthorne P (2008) Land clearing and the biofuel carbon debt. Science 319(5867):1235–1238CrossRefGoogle Scholar
  9. Fisher G, van Velthuizen H, Shah M, Nachtergaele F (2002) Global agro-ecological assessment for agriculture in the 21st century: methodology and results. International Institute for Applied Systems Analysis (IIASA) and Food and Agriculture Organization of the United Nations (FAO), Laxenburg/RomeGoogle Scholar
  10. Havlik P, Schneider UA, Schmid E, Böttcher H, Fritz S, Skalskỳ R, Aoki K, Cara SD, Kindermann G, Kraxner F, et al. (2011) Global land-use implications of first and second generation biofuel targets. Energy Policy 39(10):5690–5702CrossRefGoogle Scholar
  11. Hertel T, Golub A, Jones A, O’Hare M, Plevin R, Kammen D (2010) Effects of us maize ethanol on global land use and greenhouse gas emissions: estimating market-mediated responses. BioScience 60(3):223–231CrossRefGoogle Scholar
  12. Hommes C, van Eekelen A (1996) Partial equilibrium analysis in a noisy chaotic market. Econ Lett 53(3):275–282CrossRefGoogle Scholar
  13. Lundberg L, Jonson E, Lindgren K, Bryngelsson D, Verendel V (2014) A cobweb model of land-use competition between food and bioenergy crops (submitted)Google Scholar
  14. Persson UM (2014) The impact of biofuel demand on agricultural commodity prices: a systematic review. Accepted for publication in WIREs Energy and EnvironmentGoogle Scholar
  15. Rounsevell M, Arneth A, Brown D, de Noblet-Ducoudr N, Ellis E, Finnigan J, Galvin K, Grigg N, Harman I, Lennox J, Magliocca Ns, Parker D, ONeill B, Verburg P, Young O (2013) Incorporating human behaviour and decision making processes in land use and climate system models. GLP Report No. 7Google Scholar
  16. Searchinger T, Heimlich R, Houghton RA, Dong F, Elobeid A, Fabiosa J, Tokgoz S, Hayes D, Yu T (2008) Use of U.S. croplands for biofuels increases greenhouse gases through emissions from land-use change. Science 319:1238–1240CrossRefGoogle Scholar
  17. Waugh FV (1964) Cobweb models. J Farm Econ 46(4):732–750CrossRefGoogle Scholar

Copyright information

© Springer International Publishing Switzerland 2015

Authors and Affiliations

  1. 1.Department of Energy and EnvironmentChalmers University of TechnologyGöteborgSweden

Personalised recommendations