Federico Bert presented a paper at the International Congress on Environmental Modelling and Software, 5-8 July 2010, Ottawa, Canada. The theme of the meeting was “Modelling for Environment's Sake,” and had the aim of enhancing environmental processes and decision making by fostering the discussion and interchange of challenges, solutions, ideas, new methods and techniques, and future research lines in environmental modelling and software.
Bert’s paper, titled “An agent-based land rental market for agricultural production in the Argentine Pampas,” introduces LARMA, a land rental market model with endogenous formation of Land Rental Price (LRP). As more of 50% of cropping in the Pampas take place on rented land, it is important to understand the dynamics of land price.
LARMA is a “hybrid” market model that relies partly on neoclassical economics for ease of design and implementation, but also addresses drawbacks of this approach by integrating the market model into an agent-based modeling framework. For instance, LARMA relaxes the assumption of a representative agent by considering agents with heterogeneous characteristics that may induce differences in the prices that agents are willing to pay or accept for land rental. Although LARMA still does not include bilateral trading between agents, it does involve other interactions (e.g., farmers monitor economic outcomes achieved by their peers) leading to adjustments in agents’ willingness to pay/accept certain land rental prices.
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