Replicator Dynamic Learning in Muth's Model of Price Movements

Joel Carton and Eran Guse ()
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Joel Carton: Department of Economics, Florida International University

No 10-18, Working Papers from Department of Economics, West Virginia University

Abstract: We investigate the stability properties of Muth's model of price movements when agents choose a production level using replicator dynamic learning. It turns out that when there is a discrete set of possible production levels, possible stable states and stability conditions differ between adaptive learning and replicator dynamic learning. Furthermore, we show that the stability disparities between the two types of learning are due to the way asymptotic stability is defined under the replicator dynamics.

Keywords: Asymptotic stability; replicator dynamics; cobweb model; E-stability; Nash equilibria. (search for similar items in EconPapers)
JEL-codes: C62 C73 D83 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-evo and nep-gth
Date: 2010
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Persistent link: http://EconPapers.repec.org/RePEc:wvu:wpaper:10-18

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