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Controlling noisy, stable and chaotic, economics

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Author Info
Ruedi Stoop () (Institute of Neuroinformatics, University/ETH Zurich and Univ. of Applied Technical Sciences of Northwestern Switzerland, Olten)
Albert Kern () (Institute of Neuroinformatics, University/ETH Zurich)
Clemens Wagner () (Department of Pharmacology, University of Bern)
Abstract

We investigate a simple nonlinear model of economics to which strong multiplicative noise is added, and find two distinct generic control regimes. In the regime of noisy behavior, the application of the control is able to reduce noise only if the underlying periodicity is correctly taken into account. In the chaotic regime, a shift of the optimal control point relative to the noise-free control point is observed, scaling linearly with the noise strength. The best control results emerge for unstable orbits of period-one, which suggests, that economic systems should preferably be controlled on these states.

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Publisher Info
Paper provided by Society for Computational Economics in its series Modeling, Computing, and Mastering Complexity 2003 with number 18.

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Handle: RePEc:sce:cplx03:18

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Related research
Keywords: control; simple limiter; noise; chaos; nonlinear system;

Find related papers by JEL classification:
D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
O30 - Economic Development, Technological Change, and Growth - - Technological Change - - - General

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This page was last updated on 2009-12-2.


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