;Global variables globals [ market-price ; The price of petrolio that exchange at the market total-supply2 ; total supply of petrolio offer by all sellers2 total-supply1 ; total supply of petrolio offer by all sellers1 total-demand ; total demand demanded by all buyers demand1 demand2 supply_2a supply_2b initial-price a_aggregate b_aggregate c_aggregate d_aggregate p_equ ; equilibrium price q_equ ; equilibrium quantity total_sellers ] ;breeds breed [buyers buyer ] breed [sellers1 seller1 ] ; opec seller breed [sellers2 seller2] ; non-opec seller ;own variables of breeds buyers-own [ quant-demand a b] sellers1-own [ quant-offered-1 c1 d1] sellers2-own [ quant-offered-2 c2 d2] ;Setup procedures to setup ca set-default-shape buyers "person" set-default-shape sellers1 "opec member" set-default-shape sellers2 "non opec member" set initial-price random-float 20 ; determination of intial price set market-price initial-price set total_sellers seller_number_1 + seller_number_2 ;create canals of distribution of petrolio foreach n-values canals [?] [ask (patch((random (max-pxcor * 2)) - max-pxcor) ((random (max-pycor * 2)) - max-pycor)) [set pcolor red] ] setup-buyers setup-sellers1 setup-sellers2 end to setup-buyers ; create buyers wich number is manages by slider create-buyers buyer_number ask buyers [setxy random-xcor random-ycor set color green set size 1] end to setup-sellers1 create-sellers1 seller_number_1 ; create sellers1 wich number is manages by slider ask sellers1 [setxy random-xcor random-ycor set color blue set size 1] end to setup-sellers2 create-sellers2 seller_number_2 ; create sellers2 wich number is maneges by slider ask sellers2 [setxy random-xcor random-ycor set color yellow set size 1] end ; procedure to move the turtles to go if market-price <= 0 [user-message "Defalut" stop ] if total_sellers = 0 [user-message "No simulation with no sellers" stop ] if buyer_number = 0 [user-message "No simulation with no buyers" stop ] ask buyers-on patches with [ pcolor != red ] [forward 2] ask buyers-on patches with [ pcolor = red ] [demand ] ask sellers1-on patches with [pcolor != red] [fd 2] ask sellers1-on patches with [ pcolor = red ] [offer1 ] ask sellers2-on patches with [ pcolor != red ] [fd 2] ask sellers2-on patches with [pcolor = red ] [ offer2 ] xchange tick do-plots end to demand ask buyers[ set a (alfa + ((random-float 1) - 0.5)* w) set b (1 + ((random-float 1) - 0.5)* k) set quant-demand ( a - (b * market-price)) fd 2 if long-term ; permit the passage from the short to the long term [set a (alfa + ((random-float 1) - 0.5)* w) set b (4 + ((random-float 1) - 0.5)* k) set quant-demand ( a - (b * market-price)) fd 2]] end to offer1 set c1 opec-offer set d1 0 end to offer2 set c2 (beta + ((random-float 1) - 0.5)* v ) set d2 (2 +((random-float 1) - 0.5)* h ) set quant-offered-2 ( c2 + (d2 * market-price) ) end ;----------------------------------------------------------------------------------- ; This procedure matches demand and supply to xchange ask sellers1 [ set quant-offered-1 sum [ c1 + d1 * 10] of sellers1 set total-supply1 quant-offered-1 ] ask sellers2 [ set quant-offered-2 sum [c2 + d2 * market-price] of sellers2 set total-supply2 ( quant-offered-2 ) set supply_2a sum [c2 + d2 * 5] of sellers2 set supply_2b sum [c2 + d2 * 15] of sellers2 ] ask buyers [ set total-demand sum [ a - b * market-price] of buyers ; the total demand in the market set demand1 sum [ a - b * 5] of buyers set demand2 sum [ a - b * 15] of buyers ] ;------------------------------------------------ ;Aggregate demand and supply set a_aggregate (demand1 - 5 *(demand2 - demand1)/(15 - 5)) set b_aggregate ((demand1 - demand2)/(15 - 5)) set c_aggregate ((supply_2a + total-supply1) - 5 *(supply_2b - supply_2a)/(15 - 5)) set d_aggregate ((supply_2b - supply_2a)/(15 - 5)) ;Determination of Equilibrium price and quantity set p_equ (a_aggregate - c_aggregate)/( b_aggregate + d_aggregate) set q_equ (a_aggregate - b_aggregate * p_equ) set market-price p_equ end ;Plot procedure to do-plots set-current-plot "Non Opec Supply" plot total-supply2 set-current-plot "Opec Supply" plot total-supply1 set-current-plot "Total Demand" plot total-demand set-current-plot "Price equilibrium" plot p_equ set-current-plot "Quantity Equilibrium" plot q_equ set-current-plot "Total Supply" plot total-supply1 + total-supply2 end @#$#@#$#@ GRAPHICS-WINDOW 360 10 659 330 16 16 8.76 1 10 1 1 1 0 1 1 1 -16 16 -16 16 0 0 1 ticks CC-WINDOW 5 666 1075 761 Command Center 0 BUTTON 17 19 80 52 NIL setup NIL 1 T OBSERVER NIL NIL NIL NIL SLIDER 7 164 179 197 buyer_number buyer_number 0 300 225 1 1 NIL HORIZONTAL BUTTON 90 20 153 53 NIL go T 1 T OBSERVER NIL NIL NIL NIL SLIDER 9 204 181 237 seller_number_1 seller_number_1 0 30 30 1 1 NIL HORIZONTAL SLIDER 8 121 180 154 canals canals 0 1000 516 1 1 NIL HORIZONTAL SLIDER 9 250 181 283 seller_number_2 seller_number_2 0 50 50 1 1 NIL HORIZONTAL SLIDER 9 292 181 325 opec-offer opec-offer 0 100 100 1 1 NIL HORIZONTAL TEXTBOX 6 519 50 537 demand 11 0.0 1 TEXTBOX 10 606 52 624 supply 11 0.0 1 TEXTBOX 154 341 339 359 Demand and Supply Parameters 13 0.0 1 TEXTBOX 20 389 73 407 Intercept 11 0.0 1 SLIDER 251 376 352 409 beta beta 10 30 23 1 1 NIL HORIZONTAL TEXTBOX 172 423 274 441 Control parameters: 11 0.0 1 INPUTBOX 99 587 149 650 v 10 1 0 Number TEXTBOX 102 457 169 480 Intercepts 11 0.0 1 INPUTBOX 99 504 149 568 w 10 1 0 Number TEXTBOX 247 455 279 473 Slopes 11 0.0 1 INPUTBOX 240 503 290 565 k 8 1 0 Number INPUTBOX 239 585 289 649 h 6 1 0 Number SLIDER 130 376 228 409 alfa alfa 15 30 25 1 1 NIL HORIZONTAL PLOT 662 10 862 160 Non Opec Supply time quantity 0.0 10.0 0.0 0.0 true false PENS "total-supply2" 1.0 0 -2674135 true PLOT 663 164 863 314 Total Demand time quantity 0.0 10.0 0.0 0.0 true false PENS "total-demand" 1.0 0 -16777216 true MONITOR 245 141 316 186 NIL initial-price 2 1 11 PLOT 663 315 863 465 Price Equilibrium time NIL 0.0 10.0 0.0 0.0 true false PENS "p_equ" 1.0 0 -16777216 true MONITOR 245 195 317 240 NIL market-price 2 1 11 PLOT 864 10 1064 160 Opec Supply time quantity 0.0 10.0 0.0 0.0 true false PENS "total-supply1" 1.0 0 -16777216 true PLOT 866 314 1066 464 Quantity Equilibrium time NIL 0.0 10.0 0.0 0.0 true false PENS "q_equ" 1.0 0 -16777216 true MONITOR 245 247 317 292 Quantity q_equ 2 1 11 PLOT 865 163 1065 313 Total Supply NIL NIL 0.0 10.0 0.0 0.0 true false PENS "total-supply1 + total-supply2" 1.0 0 -16777216 true SWITCH 194 22 303 55 long-term long-term 1 1 -1000 TEXTBOX 373 542 503 580 Aggregate Demand Function 15 0.0 1 TEXTBOX 552 549 584 587 y = 15 0.0 1 MONITOR 603 535 676 580 NIL a_aggregate 2 1 11 TEXTBOX 687 548 705 567 - 15 0.0 1 MONITOR 719 535 793 580 NIL b_aggregate 2 1 11 TEXTBOX 808 546 958 565 p 15 0.0 1 TEXTBOX 374 614 500 652 Aggregate Supply Function 15 0.0 1 TEXTBOX 552 619 588 639 y = 15 0.0 1 MONITOR 604 605 678 650 NIL c_aggregate 2 1 11 TEXTBOX 685 619 703 638 + 15 0.0 1 MONITOR 719 604 793 649 NIL d_aggregate 2 1 11 TEXTBOX 811 615 961 634 p 15 0.0 1 @#$#@#$#@ WHAT IS IT? ----------- The model represents a simple oil market. It has three kinds of breeds, which are: buyers and two different sellers. The first sellers named sellers1 represent the OPEC member and the second named sellers2 represent the non OPEC member. The interaction between buyers and sellers is simulated by observing single supply and demand functions and then aggregating them. The model evaluates equilibrium price and quantity in short term and long one. HOW IT WORKS ------------ Every turtles (agents) have a single linear demand referred to the buyers and supply function referred to the sellers. Initial price is fixed randomly in range (0, 20). Linear functions are generated according to the equation: y = a - bx ; demand function y = c + dx ; supply function for sellers2 y = constant ; supply function for seller1. The quantity is managed by a slider. where: y is the quantity, and x is the price. The coefficients a, b, c and d are random. Single demand (supply) function is defined choosing values a, b, c, d. They represent intercept and slope of the line. These values are generated through uniformly distributed shocks in the parameters: - demand function for short term a = (alpha + ((random-normal 0 1) * w) b = (1 + ((random-normal 0 1) * k) - demand function for the long term a = (alpha + ((random-normal 0 1) * w) b = (4 + ((random-normal 0 1) * k) - for supply function set c (beta + ((random-float 1) - 0.5)* v) set d (2 + ((random-float 1) - 0.5)* h) To aggregate the functions, the exchange procedure, given two prices (in the model 5 and 15), add up single quantities to obtain two points of the aggregate demand and supply. With these points the curve is obtained by interpolation. Setting aggregate demand equal to aggregate supply, we obtain equilibrium price and quantity. HOW TO USE IT ------------- Before pushing SETUP, it is possible to modify any parameter with the appropriate slider or to insert values in the input cells: Canals : are the patches where turtles can exchange buyer_number : number of buyers seller_number_1 : number of sellers 1 (OPEC) seller_number_2: number of sellers 2 (non OPEC) OPEC_offer: quantity of single seller 1 alpha : constant of demand function intercept beta : constant of supply function intercept w: to increase range of variation in single demand intercept k: to increase range of variation in single demand slope v: to increase range of variation in single supply intercept h: to increase range of variation in single supply slope except the first four sliders, all the other inputs can be changed while the simulation is running. The switcher long term, allows to pass from short term to long one during the simulation. After setting parameters and number of agents, the button SETUP can be pushed. In this way turtles are created and the initial price is fixed randomly. The GO button will start the simulation. THINGS TO NOTICE ---------------- Modifying parameters which influence intercept, the equilibrium price and quantity have an increase in volatility, and a major increment in quantity is noticed. Changing the OPEC offer quantity makes a consistent price variation during the simulation. THINGS TO TRY ------------- Hence, during the simulation, the variation of parameters alpha and gamma could be interpreted as a "shock" in the aggregated demand and aggregated supply, which modify the equilibrium price. Passing form short term to long one it's possible to see the difference in variation of price, quantity and the other variables. EXTENDING THE MODEL ------------------- The model can be improved in different ways in order to show a more accurate and realistic market, for example, using agents with non-linear demand and supply function or raising the number of variable that determinate the real market function. CREDITS AND REFERENCES ---------------------- This model was created as a project work for the course of "Computer Science, Simulation and Economics" (2007-2008) held by Professor Pietro Terna, at the Faculty of Economics, University of Turin. @#$#@#$#@ 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 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