Controlling noisy, stable and chaotic, economics
AbstractWe 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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Bibliographic InfoPaper provided by Society for Computational Economics in its series Modeling, Computing, and Mastering Complexity 2003 with number 18.
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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; Research and Development; Intellectual Property Rights - - - General
This paper has been announced in the following NEP Reports:
- NEP-CMP-2003-09-14 (Computational Economics)
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