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Preferable disequilibrium in a nonlinearcobweb economy

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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.

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Authors
  1. A. Matsumoto
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Matsumoto, A. Preferable disequilibrium in a nonlinearcobweb economy. Annals of Operations Research 89, 101–123 (1999). https://doi.org/10.1023/A:1018963204380

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  • DOI: https://doi.org/10.1023/A:1018963204380

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