Assignment 3 – Complex Systems

 Ryan Salvaggio - 43668070

The Model

This model conceptualizes the effects on a real-estate market-model utilizing agent based modelling. This model utilizes basic economic principles of supply and demand.

The model bases itself on two Agents - one being ‘Customers’ of the real estate market model, whilst the other being the Real estate itself, coined 'Houses'.

Consumers (Demand)

The Agent population, ‘Consumers’ specifies the total amount of people whom can potentially become buyers within the market. This is limited to 30 for conceptual purposes. The Agent ‘Consumer’ exists in two states, either being an ‘Active Customer’ (Active) or an ‘Inactive Customer’ (Inactive).  The transition from Inactive to Active occurs upon the basis that the ‘Budget’ of the Consumer meets the desired price of the marketplace, this is specified through the variable ‘Budget’ defining the probability that this transition will occur – this is adjustable by the user indicating a highly resistive or by accepting the market. ‘Budget’s probability in a real life scenario would be based upon numerous factors however conceptually utilizing the slider can present many of these various situations.

Upon transitioning into an active state an ‘Active consumer’ will attempt to find the closest ‘For sale household’, this is represented and carried out through the ‘Enter’ action.  Upon finding a household the consumer and house will both return to their respected inactive state thus repeating the process.

Demand – ‘Count of active customers – demand’ is then calculated by a count of Consumers transitioned and currently in the Active state. A high demand would be indicative through a high ‘Budget’ responsiveness whilst a low demand would be indicative of a low ‘Budget’ responsiveness. The increase in Price and hence supply of household thus reduces demand and vise versa.  

House (Supply)

The Agent population, ‘Houses’ specifies the total amount of households that can potentially become for sale within the market. This is limited to 112 for conceptual purposes. The Agent ‘House’ exists in two states, either being ‘For Sale’ (Active) or ‘Not for Sale’ (Inactive).  The transition from Inactive to Active occurs upon the basis that the ‘Motivation to Sell’ of the House is satisfied, this satisfaction is specified by a set probability that this transition will occur – this is adjustable by the user indicating a highly responsive or restricted house market. ‘Motivation to sell’ probability in a real life scenario would be based upon numerous factors however conceptually utilizing the slider can present many of these various situations.

Upon transitioning into an active state a ‘For Sale’ house will wait for an ‘Active Customer’ ‘this is represented and carried out through the ‘Search’ action. Upon completion of the action both states become inactive and the process continues.

Supply – ‘Count of houses for sale –supply’ is then calculated by a count of Houses ‘For Sale’ that are currently in the active state. Ultimately a high Motivation to sell would sharply increase supply, whilst a low motivation would have the adverse effects.  

Movement Speed

Movement speed – describes the base movement rate of Consumers. This variable describes the transition into the ‘Inactive’ state of a consumer, ultimately when a household is found and purchased. Movement speed affects both demand and supply in the sense that the transitioning of stages is quickened and more responsive. (Indicated by a more rigid demand and supply curve).

Market Price

In economics Price is a linear function (straight line) of the proportion of houses for sale (positive slope), and also a linear function of the proportion of buyers (negative slope).Therefore , the variable ‘Market Price’ is calculated by 10 * the portion of ‘House’ in the active state (which is the supply) over the portion of ‘Consumers’ in the active state (which is the demand) Ultimately this presents the economic principles  that as Supply is directly related to Price and demand is inversely related to Price.

Note

Each simulation (with the same settings) will present a different and unique simulation. I have set a Random Boolean to the active component that randomizes the amount of Customers or houses that begin in their active state. The probability is only 0.008 but is useful in describing the effects on the market from various position’s and seeing unique models.  

References

https://www.youtube.com/watch?v=ynuoZQbqeUg - Your First ABM/Part II

https://insightmaker.com/insight/35714/Foraging-Model

Brief of the model:

The model predicts the outbreak of COVID-19 in the Burnie, Tasmania area. It is imperative to clarify that this model was developed from the SEIR model (Susceptible, Infected, Infected, Recovered). The spread of this pandemic is driven by a combination of infection rates, mortality rates, and recovery rates from the virus itself, as well as government policies.

For COVID-19 itself, vaccination directly reduces the infection rate, thereby reducing the mortality rate of COVID-19 patients and the reduction of confirmed cases. In other words, if the local population is adequately vaccinated, everyday life, shopping, tourism, and even national borders will be open rather than in a closed border situation.

Assumption of the model:

The model simulated based on different rates, including Infecting rate, Death Rate, Test Rate, Immunity Loss Rate and Recovery Rate. And, this model lists six elements of government policy, which including border closure, travel ban, social distancing, business restriction, self-quarantine, and vaccination schedule.

Besides, the model considers three economic entities in the Burnie area, one in the brick-and-mortar industry and online business industry. Government policies have somewhat reduced COVID-19 infections. Still, they have also at the same time, online businesses played an essential role in stimulating local economic activity during the pandemic. At the same time, however, online businesses played an indispensable role in promoting regional economic activity during the pandemic.

The prediction model is for reference only, and there may be differences between the actual cases and the model.

Insights of the model:

Due to the high infection and low recovery rates and timely government policy interventions, the number of susceptible individuals changes dramatically in the first four weeks. However, the number of sensitive individuals continues to decline after this period, but the decline is not significant. Secondly, with the implementation of government policies, the number of suspected patients who tested negative for medical follow-up continued to rise, implying that government policy interventions directly affect COVID-19.

 Goodwin cycle IM-2010 with debt and taxes added, modified from Steve Keen. THis can be extended by adding the Ponzi effect of borrowing for speculative investment.

Regulation of resource allocation to production in response to inventory adequacy and delivery delay. A non-price-mediated resource allocation system. From Sterman JD Business Dynamics p172 Fig 5-27