Diffusion of flood damage: an application to the wine sector

How can the direct impact of a flood on one agent in a production network affect other agents in the same network? Indirect flood damage is more difficult to measure than direct flood damage, and the methods for doing so have received less attention in the scientific literature. However, understanding it is key to improving cost-benefit analysis methods. Agent-based models provide us with a natural way to describe complex systems and model agent behavior, helping to capture diffusion from the bottom up. We propose a novel agent-based model for the simulation of a cooperative winemaking system to understand and track damage diffusion in production networks. Our model represents an economic network composed of farmers and the cooperative wineries they are associated with, and allows us to use it as a virtual laboratory in which to test the effects of floods of different magnitudes and how flood damage can spread along an economic network. The simulations carried out show how, in the event of flooding, the configuration of the network provokes side effects on agents that are not directly affected.