Impacts on Stability of Interdependencies Between Markets in a Cobweb Model

Journal article, 2015

We present a cobweb model of interdependent markets on both the sup- ply 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 inter- dependencies have opposing effects. Linking markets on the supply side transfers instabilities within the system and may cause price fluctuations in previously sta- ble markets. Market interdependency on the demand side, on the other hand, has a stabilizing effect.