patches-own [ insolvency-level ] turtles-own [ wealth ] breed [ no-risk-banks no-risk-bank ] breed [ pro-risk-banks pro-risk-bank ] to setup clear-all setup-turtles ask patches [ set pcolor black set insolvency-level random 100 ] do-plotting end to setup-turtles set-default-shape turtles "house" crt initial-num-banks [ setxy random-xcor random-ycor set wealth costs * 4 ifelse (random-float 1.0 < no-risk-banks-probability) [ set breed no-risk-banks set color lime ] [ set breed pro-risk-banks set color orange ] ] end to go ask turtles [ move-turtles draw-up-mortgages reproduce ] tick do-plotting end to move-turtles right random 360 forward step-length set wealth wealth - costs if wealth < 0 [ die ] end ;;-------------------------------------------------------------------------------------------------------------------------------------------- to draw-up-mortgages ;; divide on banks categories, choise of strategy--------------------- ifelse breed = no-risk-banks [ draw-up-mortgages-prime ] [ if breed = pro-risk-banks [ draw-up-mortgages-subprime ] ] end to draw-up-mortgages-prime ;; no-risk-banks strategy : draw up only if the patch insolvency level ;; is below the threshold --------------------------------------------------------------------------- if insolvency-level < insolvency-threshold [ prime-mortgage-result ] end to prime-mortgage-result ;; calculate the no-risk-mortgage insolvency chance,then ----------------------------------------------- ;; increase or decrease the wealth ifelse prime-insolvency-chance >= random-float 1.0 [ set pcolor red set wealth wealth + property-value-on-the-market ;; recover the capital funded (eviction) + or - the property value on the market ][ set pcolor green set wealth wealth + ( capital-funded * (prime-rate / 100) ) ;; recover the capital funded + the interest ] end to draw-up-mortgages-subprime ;; pro-risk-banks strategy : draw up only if the patch insolvency level ;; is above the threshold ---- if insolvency-level > insolvency-threshold [ subprime-mortgage-result ] end to subprime-mortgage-result ;; calculate the pro-risk-mortgage insolvency chance,then ----------------------------------------------- ;; increase or decrease the wealth ifelse subprime-insolvency-chance < random-float 1.0 [ set pcolor yellow set wealth wealth + ( capital-funded * (subprime-rate / 100) ) ;; recover the capital funded + the interest ] [ set pcolor red set wealth wealth + property-value-on-the-market ;; recover the capital funded (eviction) + or - the property value on the market ] end to reproduce if wealth > wealth-effect-threshold [ set wealth wealth - investments hatch 1 ] end to do-plotting set-current-plot "Banks profits over time" set-current-plot-pen "no-risk" plot count no-risk-banks set-current-plot-pen "pro-risk" plot count pro-risk-banks end @#$#@#$#@ GRAPHICS-WINDOW 404 10 843 470 16 16 13.0 1 10 1 1 1 0 1 1 1 -16 16 -16 16 0 0 1 ticks CC-WINDOW 5 587 852 682 Command Center 0 SLIDER 18 121 195 154 initial-num-banks initial-num-banks 0 100 24 1 1 NIL HORIZONTAL BUTTON 68 18 132 51 Setup Setup NIL 1 T OBSERVER NIL NIL NIL NIL BUTTON 261 21 324 54 go go T 1 T OBSERVER NIL NIL NIL NIL SLIDER 198 121 387 154 costs costs 1 20 8 1 1 NIL HORIZONTAL SLIDER 198 157 387 190 capital-funded capital-funded 0 400 274 1 1 NIL HORIZONTAL SLIDER 619 506 784 539 prime-rate prime-rate 1 50 9 1 1 NIL HORIZONTAL MONITOR 19 479 181 524 no risk banks count no-risk-banks 17 1 11 MONITOR 19 528 185 573 no risk mortgages drawn up count patches with [ pcolor = green ]\n 17 1 11 SLIDER 17 157 195 190 no-risk-banks-probability no-risk-banks-probability 0 1.0 0.5 0.01 1 NIL HORIZONTAL SLIDER 404 539 614 572 insolvency-threshold insolvency-threshold 0 99 51 1 1 NIL HORIZONTAL SLIDER 404 505 614 538 prime-insolvency-chance prime-insolvency-chance 0 1.0 0.53 0.01 1 NIL HORIZONTAL SLIDER 404 471 614 504 subprime-insolvency-chance subprime-insolvency-chance 0 1.0 0.57 0.01 1 NIL HORIZONTAL SLIDER 619 471 784 504 subprime-rate subprime-rate 0 50 18 1 1 NIL HORIZONTAL SLIDER 198 193 387 226 property-value-on-the-market property-value-on-the-market - 100 100 1 1 1 NIL HORIZONTAL SLIDER 16 193 195 226 wealth-effect-threshold wealth-effect-threshold 0 500 329 1 1 NIL HORIZONTAL PLOT 17 231 398 470 Banks profits over time time Banks profits 0.0 10.0 0.0 100.0 true true PENS "no-risk" 1.0 0 -13840069 true "pro-risk" 1.0 0 -955883 true MONITOR 184 479 362 524 pro risk banks count pro-risk-banks\n 17 1 11 SLIDER 198 85 387 118 step-length step-length 0 50 4 1 1 NIL HORIZONTAL MONITOR 184 528 364 573 insolvent mortgages drawn up count patches with [ pcolor = red ] 17 1 11 SLIDER 19 86 195 119 investments investments 0 300 214 1 1 NIL HORIZONTAL @#$#@#$#@ WHAT IS IT? ----------- The model try to explain the dynamics and the trends of american mortgages loan market. Banks that are more successful in getting mortgage gain on profits. This model includes two kinds of banks: those that draw up high-risk-mortgage (SubPrime-mortgage) and those that draw up low-risk-mortgage (prime-mortgage). It shows how these two different strategies do by varing the insolvency-chance of the mortgage Prime and SubPrime and by varing other variables of the market. HOW IT WORKS ------------ Every turn, each bank looks at the patch that it is currently on, and draw up a mortgage. The no-risk-banks draw up regardless of the insolvency-chance-threshold on the current patch. The no-risk-banks won't grant the mortgage above a certain threshold. Below the "insolvency-threshold", the mortgage has a lower chance to default than above it. Thus, the no-risk-banks agents have more chance to make profits, while the pro-risk-banks agents draw up mortgage only high-risk, so they have more chance to lost. HOW TO USE IT ------------- GO: Starts and stops the model. SETUP: Resets the simulation according to the parameters set by the sliders. INITIAL-NUM-BANKS: Sets the number of initial banks. NO-RISK-BANKS-PROBABILITY: Sets the chance an initial bank will be of the NO-RISK breed STEP-LENGTH: This value determines the movement of the bank. Each bank will move forward a distance of STEP-LENGTH each turn. As the value is increased, the banks will move to other patches more frequently. CAPITAL-FUNDED: Each time a bank draw up a mortgage from the patch that it currently occupies, if the mortgage doesn't default, the bank gain the interest calculated on this value set by the slider. PRIME-RATE: it's the rate of interest gained on the Prime-mortgage SUBPRIME-RATE: it's the rate of interest gained on the SubPrime-mortgage COSTS: Every time step, each bank loses the amount of wealth set by this slider. If the banks wealth dips below 0, it dies. Every bank starts with a wealth of COSTI * 4, which means it can go 4 steps without drawing up. WEALTH-EFFECT-THRESHOLD: If a bank's wealth reaches the value of this slider, it reproduces. This value represents the wealth-gaining success that a bank would have to have in order to be able to reproduce. INVESTMENTS: Each time a bank reproduces, it loses the amount of wealth set by this slider. This value represents the wealth cost of investment. PRIME-INSOLVENCY-CHANCE: This value is the percentage chance that the Prime-mortgage below the growth threshold will default the loan. SUBPRIME-INSOLVENCY-CHANCE: This value is the percentage chance that the grass above the growth threshold will default the loan. INSOLVENCY-THRESHOLD: This value sets the default mortgage threshold. At, or above this value, the mortgage default with SUBPRIME-INSOLVENCY-CHANCE. Below this value, the mortgage defaults with PRIME-INSOLVENCY-CHANCE. PROPERTY-VALUE-ON-THE-MARKET: this is a very important value you can set. It determines banks' loss and gains. If the borrower defaults on the loan, the bank would have the legal right to repossess the house and sell it, to recover sums owing to it. But, if prices of houses market are growning up, the bank gains a profit; if prices drop the bank get a loss. THINGS TO TRY ---------------- At what value of PROPERTY-VALUE-ON-THE-MARKET do the populations' wealth change dramatically? What does this indicate about the advantages of Sub-Prime versus being Prime? What are the important environmental factors? Change the COSTS and the INVESTMENTS values. How do these values affect the model? Change the PRIME-INSOLVENCY-CHANCE and the SUBPRIME-INSOLVENCY-CHANCE values. How do these values affect the model? How does the INSOLVENCY-THRESHOLD value affect the growth of the populations? @#$#@#$#@ default true 0 Polygon -7500403 true true 150 5 40 250 150 205 260 250 airplane true 0 Polygon -7500403 true true 150 0 135 15 120 60 120 105 15 165 15 195 120 180 135 240 105 270 120 285 150 270 180 285 210 270 165 240 180 180 285 195 285 165 180 105 180 60 165 15 arrow true 0 Polygon -7500403 true true 150 0 0 150 105 150 105 293 195 293 195 150 300 150 box false 0 Polygon -7500403 true true 150 285 285 225 285 75 150 135 Polygon -7500403 true true 150 135 15 75 150 15 285 75 Polygon -7500403 true true 15 75 15 225 150 285 150 135 Line -16777216 false 150 285 150 135 Line -16777216 false 150 135 15 75 Line -16777216 false 150 135 285 75 bug true 0 Circle -7500403 true true 96 182 108 Circle -7500403 true true 110 127 80 Circle -7500403 true true 110 75 80 Line -7500403 true 150 100 80 30 Line -7500403 true 150 100 220 30 butterfly true 0 Polygon -7500403 true true 150 165 209 199 225 225 225 255 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