Stability, chaos and multiple attractors: A single agent makes a difference

Tamotsu Onozaki, Gernot Sieg, Masanori Yokoo

Research output: Contribution to journalArticle

24 Citations (Scopus)

Abstract

This paper provides an example in which a slight behavioral heterogeneity may fundamentally change the dynamical properties of a nonlinear cobweb market with a quadratic cost function and an isoelastic demand function. We consider two types of producers; cautious adapters and naive optimizers. In a market of naive optimizers a single cautious adapter stabilizes the otherwise exploding market. In a market of cautious adapters a single naive optimizer may destabilize the market; without him there exists at most one periodic attractor in the market but with him there may appear many (and even infinitely many) coexisting periodic attractors.

Original languageEnglish
Pages (from-to)1917-1938
Number of pages22
JournalJournal of Economic Dynamics and Control
Volume27
Issue number10
DOIs
Publication statusPublished - Aug 2003

Keywords

  • 2-D nonlinear cobweb model
  • Behavioral heterogeneity
  • Chaos
  • Coexisting periodic attractors
  • Homoclinic bifurcations

ASJC Scopus subject areas

  • Economics and Econometrics
  • Control and Optimization
  • Applied Mathematics

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