Capital Gains and Demand

[duilio]

Hi all,
I need some hints on how to model the following.

Let's imagine I want to model the effect on demand for a commodity derived from the expectations of future capital gains (expectations of making profits due to price increase).

We'll have a stock variable for price, we can get the recent rate of price change as ratio between price and recent price.


I have no idea on how to model the capital gain derived from this recent rate of price change and the impact on demand.


Any hints?

Thanks a lot in advance!
G

[duilio]

Hi all,

I post the question on this forul also.
I need some hints on how to model the following.

Let's imagine I want to model the effect on demand for a commodity derived from the expectations of future capital gains (expectations of making profits due to price increase).

We'll have a stock variable for price, we can get the recent rate of price change as ratio between price and recent price.


I have no idea on how to model the capital gain derived from this recent rate of price change and the impact on demand.


Any hints?

Thanks a lot in advance!
G

[bob@vensim.com]

There are a few sections on this in John Sterman's book Business Dynamics. There was also a book by Dennis Meadows called The Dynamics of Commodity Production Cycles that may touch on this. Also check the system dynamics bibliography at http://www.systemdynamics.org/biblio/sdbib.html