Stability and cycles in a cobweb model with heterogeneous expectations

Laurence Lasselle, Serge Svizzero () and Clement Tisdell
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Serge Svizzero: CEMOI - Centre d'Économie et de Management de l'Océan Indien - UR - Université de La Réunion

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Abstract: We investigate the dynamics of a cobweb model with heterogeneous beliefs, generalizing the example of Brock and Hommes (1997). We examine situations where the agents form expectations by using either rational expectations, or a type of adaptive expectations with limited memory defined from the last two prices. We specify conditions that generate cycles. These conditions depend on a set of factors that includes the intensity of switching between beliefs and the adaption parameter. We show that both Flip bifurcation and Neimark-Sacker bifurcation can occur as primary bifurcation when the steady state is unstable.

Keywords: Bounded rationality; Cobweb model; Flip bifurcation; Neimark-Sacker bifurcation (search for similar items in EconPapers)
Date: 2005-11
Note: View the original document on HAL open archive server: https://hal.univ-reunion.fr/hal-02155092
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Citations: View citations in EconPapers (22)

Published in Macroeconomic Dynamics, 2005, 9 (5), pp.630-650. ⟨10.1017/S1365100505050017⟩

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Related works:
Journal Article: STABILITY AND CYCLES IN A COBWEB MODEL WITH HETEROGENEOUS EXPECTATIONS (2005)
Working Paper: Stability and Cycles in a Cobweb Model with Heterogeneous Expectations (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02155092

DOI: 10.1017/S1365100505050017

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