Preferable disequilibrium in a nonlinearcobweb economy

A. Matsumoto

Annals of Operations Research, 1999, vol. 89, issue 0, 123 pages

Abstract: This study demonstrates the possibility that chaotic fluctuations may be preferable to acompetitive equilibrium. For this purpose, we use a linear cobweb model augmented by thelower and upper bounds for variations of output and construct densities of ergodically chaoticfluctuations. We demonstrate with the aid of numerical examples that the long‐run averageprofit and utility obtained in perpetual disequilibrium can be greater than the profit andutility at equilibrium. Copyright Kluwer Academic Publishers 1999

Date: 1999
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DOI: 10.1023/A:1018963204380

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