Instability in the cobweb model under the BNN dynamic

George Waters

Journal of Mathematical Economics, 2010, vol. 46, issue 2, 230-237

Abstract: The cobweb model where firms choose between rational and naive forecasting strategies has a 2-cycle when the slope of supply is greater than the slope of demand for a number of different dynamics describing the evolution of strategy choices. This paper proves that the 2-cycle is exponentially unstable under the learning dynamic of Brown et al. (1950). Issues arising in the analysis of piecewise smooth discrete time maps are discussed.

Keywords: Chaos; Cobweb; model; Learning; BNN (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:eee:mateco:v:46:y:2010:i:2:p:230-237

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