Product flow and price change in an agricultural distribution network

Daekyung Lee, Seong-Gyu Yang, Kibum Kim and Beom Jun Kim

Physica A: Statistical Mechanics and its Applications, 2018, vol. 490, issue C, 70-76

Abstract: We use the structure of a real distribution network of agricultural product in Korea and investigate how the change in the supply may affect the price changes in agents across the distribution network. In particular, we focus on the real network structure of cabbage distribution composed of various types of agents, from farms to consumers, and apply a dynamic model to describe how each participant reacts upon the change of input and output flow of products through the adjustment of price. Our main result implies that the effect of fluctuation of production quantity in the supplying participant can be nontrivial and the consumer price responds to such changes. We believe that our results can be useful to predict what will happen if the agricultural production changes much in the future due to the climate changes.

Keywords: Complex networks; Distribution network; Price change; Supply and demand (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:eee:phsmap:v:490:y:2018:i:c:p:70-76

DOI: 10.1016/j.physa.2017.08.006

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