  We study the relationship between galaxy luminosity, color, and environment
in a cosmological simulation of galaxy formation. We compare the predicted
relationship with that found for SDSS galaxies and find that the model
successfully predicts most of the qualitative features seen in the data, but
also shows some interesting differences. Specifically, the simulation predicts
that the local density around bright red galaxies is a strong increasing
function of luminosity, but does not depend much on color at fixed luminosity.
Moreover, we show that this is due to central galaxies in dark matter halos
whose baryonic masses correlate strongly with halo mass. The simulation also
predicts that the local density around blue galaxies is a strong increasing
function of color, but does not depend much on luminosity at fixed color. We
show that this is due to satellite galaxies in halos whose stellar ages
correlate with halo mass. Finally, the simulation fails to predict the
luminosity dependence of environment observed around low luminosity red
galaxies. However, we show that this is most likely due to the simulation's
limited resolution. A study of a higher resolution, smaller volume simulation
suggests that this dependence is caused by the fact that all low luminosity red
galaxies are satellites in massive halos, whereas intermediate luminosity red
galaxies are a mixture of satellites in massive halos and central galaxies in
less massive halos.
