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dc.contributor.authorDixon, David S.
dc.date.accessioned2011-08-31T15:16:18Z
dc.date.available2011-08-31T15:16:18Z
dc.date.issued2011-08-31
dc.date.submittedJuly 2011
dc.identifier.urihttp://hdl.handle.net/1928/13136
dc.description.abstractThis dissertation presents a prototype model and methodology for validating a simple agent-based model against the basic Hotelling monopoly model and a few basic extensions. Hotelling's Rule identi es the expected behavior of a market for a nonrenewable resource. The statement is simple - marginal profit will increase at the prevailing rate of interest - but the implications are far-reaching and not broadly understood. Agent-based modeling is a computer modeling and simulation methodology. It has its origins in biology and physics, but has become a powerful tool in the social sciences for examining systems in which the well-understood behaviors of individuals result in unanticipated outcomes. Validation of the basic Hotelling monopoly model is a necessary step in wider acceptance of agent-based modeling as a predictive and analytical tool in natural resource economics. An agent-based model is a valid predictive tool if, given rules to express preferences, it is possible to predict the large-scale outcomes of the choices made by individuals over time. An agent-based model is a valid analytical tool if it provides a means to explore the behaviors that lead to known results, much like nonlinear regression. This simple agent-based model is found to be valid for the basic Hotelling monopoly model. The agent-based model is validated with caveats for the Hotelling monopoly model with extensions to include basic production technologies. The caveats are based on small deviations, the magnitudes of which depend on the specific form of costs associated with a production technology. It is argued that those deviations are not unlike the deviations that a human would make. An extension of the Hotelling monopoly model to a small oligopoly exhibits emergent cooperation-like properties, despite the absence of explicit interagent communication. Depending on the number of producers and the initial distribution of resource stocks, the behavior is either collusion-like or Cournot-like. The Cournot-like outcome occurs when only some of the producers lower production, resulting in a rise in the market price, which causes the other producers to experience a Hotelling's Rule increase in marginal profit without reducing their own production. This continues at each time step, so that the latter producers maintain a constant, higher production level while the others continue to decrease production. The outcomes of the agent-based models are reassessed with the costs previously arising from production technologies replaced by taxes associated with fiscal policies. Each fiscal regime is evaluated in terms of its efficacy and the unintended consequences of the policy. The policy goals examined are preservation for future generations, internalization of externalities (Pigouvian taxation), and revenue generation. This comparison uses data from the agent-based models, examining agent error as one of the unintended consequences of fiscal policy. The basics of agent-based modeling are presented. This methodology is suited to problems in which the immediate preferences of the agents can be stated as equations or rules but complexity in their interactions with the environment or each other make predicting the outcomes difficult.en_US
dc.language.isoen_USen_US
dc.subjectNonrenewable Resourcesen_US
dc.subjectHotelling's Ruleen_US
dc.subjectAgent-Based Modelingen_US
dc.subject.lcshNonrenewable natural resources--Econometric models
dc.subject.lcshMultiagent systems
dc.titleComputational Methods in Natural Resource Economics: Agent-Based Modeling and Hotelling's Ruleen_US
dc.typeDissertationen_US
dc.description.degreeEconomicsen_US
dc.description.levelDoctoralen_US
dc.description.departmentUniversity of New Mexico. Dept. of Economicsen_US
dc.description.advisorChermak, Janie M.
dc.description.advisorGrimsrud, Kristine
dc.description.committee-memberKrause, Catherine
dc.description.committee-memberCullen, Bradley T.
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Agent-based modeling is a\ncomputer modeling and simulation methodology. It has its origins in biology and physics,\nbut has become a powerful tool in the social sciences for examining systems in which the\nwell-understood behaviors of individuals result in unanticipated outcomes.\n\nValidation of the basic Hotelling monopoly model is a necessary step in wider acceptance\nof agent-based modeling as a predictive and analytical tool in natural resource economics.\nAn agent-based model is a valid predictive tool if, given rules to express preferences, it is\npossible to predict the large-scale outcomes of the choices made by individuals over time. An\nagent-based model is a valid analytical tool if it provides a means to explore the behaviors\nthat lead to known results, much like nonlinear regression.\n\nThis simple agent-based model is found to be valid for the basic Hotelling monopoly\nmodel. The agent-based model is validated with caveats for the Hotelling monopoly model\nwith extensions to include basic production technologies. The caveats are based on small\ndeviations, the magnitudes of which depend on the specific form of costs associated with a\nproduction technology. It is argued that those deviations are not unlike the deviations that\na human would make.\n\nAn extension of the Hotelling monopoly model to a small oligopoly exhibits emergent\ncooperation-like properties, despite the absence of explicit interagent communication. Depending\non the number of producers and the initial distribution of resource stocks, the\nbehavior is either collusion-like or Cournot-like. The Cournot-like outcome occurs when\nonly some of the producers lower production, resulting in a rise in the market price, which\ncauses the other producers to experience a Hotelling's Rule increase in marginal profit without\nreducing their own production. This continues at each time step, so that the latter\nproducers maintain a constant, higher production level while the others continue to decrease\nproduction.\n\nThe outcomes of the agent-based models are reassessed with the costs previously arising\nfrom production technologies replaced by taxes associated with fiscal policies. Each fiscal\nregime is evaluated in terms of its efficacy and the unintended consequences of the policy. The\npolicy goals examined are preservation for future generations, internalization of externalities\n(Pigouvian taxation), and revenue generation. This comparison uses data from the agent-based\nmodels, examining agent error as one of the unintended consequences of fiscal policy.\nThe basics of agent-based modeling are presented. This methodology is suited to problems\nin which the immediate preferences of the agents can be stated as equations or rules\nbut complexity in their interactions with the environment or each other make predicting the\noutcomes difficult.", "http://schema.org/inLanguage": "en_US", "http://schema.org/isPartOf": [ { "@id": "http://hdl.handle.net/1928/10618" }, { "@id": "http://hdl.handle.net/1928/6686" } ], "http://schema.org/name": "Computational Methods in Natural Resource Economics: Agent-Based Modeling and Hotelling's Rule" } ]}


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