Multiple equilibria and chaos in a discrete tâtonnement process
The purpose of this note is to demonstrate a sufficient condition for a discrete tâtonnement process to lead to chaos in a general equilibrium model with multiple commodities. The result indicates that as the speed of price adjustment increases, the discrete tâtonnement process is complex in a general equilibrium economy in which there are multiple equilibria.
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- Dierker, Egbert, 1972. "Two Remarks on the Number of Equilibria of an Economy," Econometrica, Econometric Society, vol. 40(5), pages 951-53, September.
- Day, Richard H. & Pianigiani, Giulio, 1991. "Statistical Dynamics and Economics," Working Paper Series 293, Research Institute of Industrial Economics.
- Goeree, Jacob K. & Hommes, Cars & Weddepohl, Claus, 1998. "Stability and complex dynamics in a discrete tatonnement model," Journal of Economic Behavior & Organization, Elsevier, vol. 33(3-4), pages 395-410, January.
- V. Medvedev, 1992. "Economic Theory," Problems of Economic Transition, M.E. Sharpe, Inc., vol. 35(7), pages 55-73, November.
- Weddepohl, Claus, 1995. "A cautious price adjustment mechanism: Chaotic behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 27(2), pages 293-300, July.
- Varian, Hal R, 1975. "A Third Remark on the Number of Equilibria of an Economy," Econometrica, Econometric Society, vol. 43(5-6), pages 985-86, Sept.-Nov.
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