We investigate the dynamics of a cobweb type model with nonlinear demand and supply curves in which producers make forecasts on future prices with a backward looking expectation formation mechanism: the expected price for the next period is obtained by a weighted average of the prices observed in the last two periods. The study herewith presents aims at confirming the existence of a locally stabilising effect due to the presence of memory, but an increase of memory in price expectations can be globally qualitatively destabilising, in the sense that it leads to coexistence of different attractors with their respective basins of attraction.

Naimzada, A., Pecora, N. (2016). Memory, market stability and attractors coexistence in a nonlinear cobweb model. JOURNAL OF DIFFERENCE EQUATIONS AND APPLICATIONS, 22(6), 766-779 [10.1080/10236198.2016.1142540].

Memory, market stability and attractors coexistence in a nonlinear cobweb model

NAIMZADA, AHMAD KABIR
Primo
;
2016

Abstract

We investigate the dynamics of a cobweb type model with nonlinear demand and supply curves in which producers make forecasts on future prices with a backward looking expectation formation mechanism: the expected price for the next period is obtained by a weighted average of the prices observed in the last two periods. The study herewith presents aims at confirming the existence of a locally stabilising effect due to the presence of memory, but an increase of memory in price expectations can be globally qualitatively destabilising, in the sense that it leads to coexistence of different attractors with their respective basins of attraction.
Articolo in rivista - Articolo scientifico
Arnold tongues; attractors coexistence; bifurcation analysis; Cobweb model; memory; stability;
Arnold tongues; attractors coexistence; bifurcation analysis; Cobweb model; memory; stability; Algebra and Number Theory; Applied Mathematics; Analysis
English
2016
22
6
766
779
open
Naimzada, A., Pecora, N. (2016). Memory, market stability and attractors coexistence in a nonlinear cobweb model. JOURNAL OF DIFFERENCE EQUATIONS AND APPLICATIONS, 22(6), 766-779 [10.1080/10236198.2016.1142540].
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/10281/107327
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