Agent-Based Urban Land Markets: Agent's Pricing Behavior, Land Prices and Urban Land Use Change

Abstract:

We present a new bilateral agent-based land market model, which moves beyond previous work by explicitly modeling behavioral drivers of land-market transactions on both the buyer and seller sides; formation of bid prices (of buyers) and ask prices (of sellers); and the relative division of the gains from trade from the market transactions. We analyze model output using a series of macro-scale economic and landscape pattern measures, including land rent gradients estimated using simple regression models. We first demonstrate that our model replicates relevant theoretical results of the traditional Alonso/Von Thünen model (structural validation). We then explore how urban morphology and land rents change as the relative market power of buyers and sellers changes (i.e., we move from a 'sellers' market' to a 'buyers' market'). We demonstrate that these strategic price dynamics have differential effects on land rents, but both lead to increased urban expansion.