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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References listed on IDEAS
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- Weddepohl, Claus, 1995. "A cautious price adjustment mechanism: Chaotic behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 27(2), pages 293-300, July.
- Dierker, Egbert, 1972. "Two Remarks on the Number of Equilibria of an Economy," Econometrica, Econometric Society, vol. 40(5), pages 951-953, September.
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- Day, Richard H. & Pianigiani, Giulio, 1991. "Statistical dynamics and economics," Journal of Economic Behavior & Organization, Elsevier, vol. 16(1-2), pages 37-83, July.
- DEBREU, Gérard, "undated".
CORE Discussion Papers RP
132, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Kaizouji, Taisei, 1994. "Multiple equilibria and chaotic tatonnement: Applications of the Yamaguti-Matano theorem," Journal of Economic Behavior & Organization, Elsevier, vol. 24(3), pages 357-362, August.
- Tuinstra, Jan, 2000. "A discrete and symmetric price adjustment process on the simplex," Journal of Economic Dynamics and Control, Elsevier, vol. 24(5-7), pages 881-907, June.
- Day, Richard H. & Pianigiani, Giulio, 1991. "Statistical Dynamics and Economics," Working Paper Series 293, Research Institute of Industrial Economics.
- Tuinstra, Jan, 1997. "A price adjustment process with symmetry," Economics Letters, Elsevier, vol. 57(3), pages 297-303, December.
- Varian, Hal R, 1975. "A Third Remark on the Number of Equilibria of an Economy," Econometrica, Econometric Society, vol. 43(5-6), pages 985-986, Sept.-Nov.
- Anjan Mukherji, 1999. "A simple example of complex dynamics," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 14(3), pages 741-749.
- 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.
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