Help from Hoarders: How Storage Can Dampen Perturbations in Critical Markets

Marshall Kuypers; Walter Beyeler; Matthew Antognoli; Michael Mitchell; Robert Glass

Complex Sciences. Second International Conference, COMPLEX 2012, Santa Fe, NM, USA, December 5-7, 2012, Revised Selected Papers

Research Article

Help from Hoarders: How Storage Can Dampen Perturbations in Critical Markets

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@INPROCEEDINGS{10.1007/978-3-319-03473-7_18,
    author={Marshall Kuypers and Walter Beyeler and Matthew Antognoli and Michael Mitchell and Robert Glass},
    title={Help from Hoarders: How Storage Can Dampen Perturbations in Critical Markets},
    proceedings={Complex Sciences. Second International Conference, COMPLEX 2012, Santa Fe, NM, USA, December 5-7, 2012, Revised Selected Papers},
    proceedings_a={COMPLEX},
    year={2013},
    month={11},
    keywords={Complex adaptive systems Agent-based model Supply networks Buffer capacity Monopoly Perturbations Storage Price fixing},
    doi={10.1007/978-3-319-03473-7_18}
}

Marshall Kuypers
Walter Beyeler
Matthew Antognoli
Michael Mitchell
Robert Glass
Year: 2013
Help from Hoarders: How Storage Can Dampen Perturbations in Critical Markets
COMPLEX
Springer
DOI: 10.1007/978-3-319-03473-7_18

Marshall Kuypers^,*, Walter Beyeler¹^,*, Matthew Antognoli^,*, Michael Mitchell¹^,*, Robert Glass¹^,*

1: Sandia National Laboratories

*Contact email: mkuyper@sandia.gov, webeyel@sandia.gov, mantogn@sandia.gov, micmitc@sandia.gov, rjglass@sandia.gov

Abstract

Critical resource supply chains are vulnerable to manipulation because of the un-substitutability of their goods. When a monopoly controls all or part of a market, it has the ability to profit from a reduction in supply of a critical resource. We model this complex adaptive system (CAS) using an agent-based model (ABM) and investigate a strategy to mitigate the potential for exploitation of a market by a monopoly. We find that when entities increase their input resource buffer, they decrease the reactivity of resource prices to supply disruptions, which limits the amount by which monopolies benefit from price fixing. This storage strategy also reduces total system losses due to a perturbation.

Keywords: Complex adaptive systems Agent-based model Supply networks Buffer capacity Monopoly Perturbations Storage Price fixing

Published: 2013-11-26

: http://dx.doi.org/10.1007/978-3-319-03473-7_18