Assignment 2

1.  My diagram focuses on the interactions between animal regulators and animal farmers, and the resulting influence on the Chesapeake Bay watershed system.  The elements in this diagram are the animal regulator, taxes/incentives, profit for farmers, amount of total animal farming, animal farming method, types of animals, waste (nitrogen/phosphorus), and bay health.  The connection between farming method, profit, and animal farming takes the form of a stabilizing feedback loop.  If one farming method is being overproduced, then potential profit from switching to the other farming method will bring the animal farming market back to an equilibrium that reflects demand.  A secondary feedback loop is formed by the involvement of regulators.  The animal farmer-farming method feedback loop that is driven by market force is influenced by the external actions of regulators who base their decisions on the current proportions of conventional and sustainable farming.  The actions of these regulators, in the form of taxes or incentives, can have either a reinforcing or stabilizing effect on the animal farming market.  One of the more interesting connections I saw was the choice of animal type which has a direct influence on the levels of nitrogen and phosphorus released into the bay, but do not affect the proportion of conventional and sustainable farming.  Ultimately, the purpose of the primary feedback loop is to ensure farmers are doing what is economically sustainable, however the purpose of the secondary (regulatory) feedback loop is to adjust the system to be environmentally sustainable.

2.   My experience playing the Bay Game taught me about the relationship regulatory taxes and market forces have over the production of conventionally or sustainably grown animals.  Before the Bay Game began I expected the behavior of the farmers to be easily controlled through my tax policies.  My plan was to reflect conventional farming’s environmental cost in its total expenses via the introduction of taxes in small increments.  I thought that the small changes in taxes would encourage incremental shifts in production and create more time for producers to rationally react to each other’s actions, resulting in a smooth reallocation of resources without rapid oscillations.  My experience in the game taught me that it is very difficult to prevent large production method shifts.  The slightest change in production methods that overshoots the projected demand can catalyze the market into oscillating between conventional and sustainable.

3.   To prevent market oscillations, I think that internal organization between the animal farmers, and communication with the animal regulators would greatly reduce the risk of market oscillations as a result of over-shots in production shits.  This strategy addresses a phenomenon that was very apparent while we played this game in class.  People were constantly trying to seek other people who they were connected to through the bay game system.  During breaks in-between rounds I saw people talking across rows, getting up to seek out other areas, or yelling their complaints to the whole class.  Real world organizations and venues that support this type of communication would increase of ability of the participants in the bay game system to achieve their intended results and avoided unintended consequences.

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