An agent-based simulation model of a nutrient trading market for natural resources management

Markets for nutrient trading, water quality and other ecosystem services are rapidly emerging across the world. A critical need is to improve the relationship between farmers' decisions and their impact on natural resources. One of the basic requirements that links buyers and sellers of ecosystem services is an agreed upon unit of trade and a way to measure it. We develop an agent-based model (ABM) which is designed to formalize the interactions between the biophysics dynamics of the natural resources and the socioeconomic factors. The simulation market builds on ABM paradigms in its concepts and is coded using the Matlab programming environment. The result shows that ABM is contributing to research questions in ecological economics areas of land-use change, public auction modeling, market dynamics, changes in owners' perceived yield potential, owners' gold, farming choice and water treatment choice aspects in human decision making and behavior change. (C) 2010 Elsevier Ltd. All rights reserved.