Complex dynamics in a cobweb model with adaptive production adjustment

Tamotsu Onozaki; Gernot Sieg; Masanori Yokoo

doi:10.1016/s0167-2681(99)90059-8

Complex dynamics in a cobweb model with adaptive production adjustment

Tamotsu Onozaki, Gernot Sieg, Masanori Yokoo

Research output: Contribution to journal › Article › peer-review

28 Citations (Scopus)

Abstract

Chaos occurs in a nonlinear cobweb model with normal demand and supply, naive expectations and adaptive production adjustment. The model differs from existing ones in that it includes adaptive production adjustment instead of adaptive expectations. The model exhibits observable chaos (strange attractors) as well as topological chaos (horseshoes) associated with homoclinic points. As numerical simulations show, the faster suppliers adjust their production and the more inelastic demand is, the more likely the market behaves chaotically.

Original language	English
Pages (from-to)	101-115
Number of pages	15
Journal	Journal of Economic Behavior and Organization
Volume	41
Issue number	2
DOIs	https://doi.org/10.1016/s0167-2681(99)90059-8
Publication status	Published - Feb 2000
Externally published	Yes

Keywords

Adaptive production adjustment
D21
E32
Homoclinic point
Nonlinear cobweb model
Observable chaos
Topological chaos

ASJC Scopus subject areas

Economics and Econometrics
Organizational Behavior and Human Resource Management

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AU - Sieg, Gernot

AU - Yokoo, Masanori

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AB - Chaos occurs in a nonlinear cobweb model with normal demand and supply, naive expectations and adaptive production adjustment. The model differs from existing ones in that it includes adaptive production adjustment instead of adaptive expectations. The model exhibits observable chaos (strange attractors) as well as topological chaos (horseshoes) associated with homoclinic points. As numerical simulations show, the faster suppliers adjust their production and the more inelastic demand is, the more likely the market behaves chaotically.

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KW - E32

KW - Homoclinic point

KW - Nonlinear cobweb model

KW - Observable chaos

KW - Topological chaos

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Complex dynamics in a cobweb model with adaptive production adjustment

Abstract

Keywords

ASJC Scopus subject areas

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