An adaptive decisional mechanism leading to chaos
AbstractIn this paper we propose a framework in order to analyze the dynamical process of decision and opinion formation of two economic homogeneous and boundedly rational agents that interact and learn from each other over time. The decisional process described in our model is an adaptive adjustment mechanism in which two agents take into account the difference between their own opinion and the opinion of the other agent. The smaller that difference, the larger the weight given to the comparison of the opinions. We also assume that if the distance between the two opinions is larger than a given threshold, then there is no interaction and the agents do not change their opinion anymore. Introducing an auxiliary variable describing the distance between the opinions, we obtain a one-dimensional map for which we investigate, mainly via analytical tools, the stability of the steady states, their bifurcations, as well as the existence of chaotic dynamics and multistability phenomena, i.e., the presence of coexisting attractors.
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Bibliographic InfoPaper provided by University of Milano-Bicocca, Department of Economics in its series Working Papers with number 252.
Date of creation: Jul 2013
Date of revision: Jul 2013
Adaptive decisional mechanism; bifurcations; multistability; complex dynamics;
Find related papers by JEL classification:
- D03 - Microeconomics - - General - - - Behavioral Microeconomics; Underlying Principles
- D79 - Microeconomics - - Analysis of Collective Decision-Making - - - Other
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-07-28 (All new papers)
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