A cobweb model of land-use competition between food and bioenergy crops

• We present a model of interacting cobweb markets and apply it to land-use competition between food and bioenergy crops. In our model the markets are interlinked on the supply side by the limited availability of land. Therefore, instabilities are transferred between the markets and we find that bioenergy demand affects food price volatility. The agents in the model have heterogeneous production capacities, representing variation in global land quality. When we allow agents to choose price predictor, we find that a more sophisticated (but costly) predictor is concentrated to some key parcels of land, which enables the system to reduce instability significantly. The system can also be brought closer to a stable state by introducing costs for changing production type, but it may then be shifted away from the optimum situation predicted by the corresponding equilibrium model.

Ämnesord

LANTBRUKSVETENSKAPER  -- Annan lantbruksvetenskap -- Miljö- och naturvårdsvetenskap (hsv//swe)

AGRICULTURAL SCIENCES  -- Other Agricultural Sciences -- Environmental Sciences related to Agriculture and Land-use (hsv//eng)

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Nationalekonomi (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Economics (hsv//eng)

Nyckelord

Bioenergy

Stability

Cobweb model

Land-use competition

Price fluctuations

Market interactions

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