Operations Research, Systems Engineering and Industrial Engineering Commons^™

Emergence Of Networks In Distance-Constrained Trade, Kumar Venkat, Wayne W. Wakeland

Systems Science Faculty Publications and Presentations

Long-distance trade has been rapidly increasing in recent years. As traders from around the world exchange goods, they form networks with traders as nodes and transactions as links. We use an agent-based model of a simple artificial economy to examine the emergence of trade networks when the distance between traders matters. Distance can become an issue if fuel for transportation becomes expensive or if greenhouse gas emissions from transportation become a major concern. We model the distance constraint as a transaction cost proportional to the amount of goods traded and the distance that those goods must be transported. We find …