Landscape Outcomes in a Model of Edge Effect Externalities: A Computational Economics Approach
AbstractThis paper examines the impact of distance-dependent spatial externalities, referred to as "edge-effect externalities," on free-market equilibrium land use patterns. Under edge-effect externalities, maximization of production possibilities will depend on minimization of landscape fragmentation, implying that both the correct allocation and the correct arrangement of land uses will be necessary conditions for an economically efficient outcome. Using an agent-based cellular automaton model, this paper deminstrates that in an unregulated free-market without bargaining, both Pareto-efficient and inefficient equilibrium landscape patterns are possible. Initial configurations of firms, permanent geographic features, and transportation costs will impact final outcomes. Further, edge-effect externalities can produce economic landscapes which are more dispersed and fragmented than the pure Von Thunen outcome.
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Bibliographic InfoPaper provided by Santa Fe Institute in its series Working Papers with number 99-07-051.
Date of creation: Jul 1999
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Economic geography; spatial externalities; land-use;
This paper has been announced in the following NEP Reports:
- NEP-ALL-1999-09-21 (All new papers)
- NEP-CMP-1999-10-04 (Computational Economics)
- NEP-EVO-1999-09-21 (Evolutionary Economics)
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