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Linear Decentralized Control with Expectations

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  • AndrÁ Simonovits

Abstract

In this paper, we consider a decentralized discrete-time control model with expectations. There are as many decision-makers as scalar state (and control) variables, and each decision-maker forms an expectation on the impact that affects him/her. Using rational and naive expectations, we describe the stability conditions of the alternative expectations. Our results generalized earlier ones by Metzler and Lovell, from an inventory control model to an abstract model, and solve the problem of the generation of a feasible normal path presented by Kornai and Martos.

Suggested Citation

  • AndrÁ Simonovits, 1999. "Linear Decentralized Control with Expectations," Economic Systems Research, Taylor & Francis Journals, vol. 11(3), pages 321-330.
    • Handle: RePEc:taf:ecsysr:v:11:y:1999:i:3:p:321-330
    DOI: 10.1080/09535319900000021
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    References listed on IDEAS

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    1. Grandmont, Jean-Michel, 1985. "On Endogenous Competitive Business Cycles," Econometrica, Econometric Society, vol. 53(5), pages 995-1045, September.
    2. Simonovits, Andras, 1981. "Maximal convergence speed of decentralized control," Journal of Economic Dynamics and Control, Elsevier, vol. 3(1), pages 51-64, November.
    3. Jean-Michel Grandmont, 1998. "Expectations Formation and Stability of Large Socioeconomic Systems," Econometrica, Econometric Society, vol. 66(4), pages 741-782, July.
    4. Kornai, Janos & Simonovits, Andras, 1977. "Decentralized control problems in neumann-economies," Journal of Economic Theory, Elsevier, vol. 14(1), pages 44-67, February.
    5. Mordecai Ezekiel, 1938. "The Cobweb Theorem," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 52(2), pages 255-280.
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    Cited by:

    1. Mayumi, Kozo, 2005. "An epistemological critique of the open Leontief dynamic model: Balanced and sustained growth, delays, and anticipatory systems theory," Structural Change and Economic Dynamics, Elsevier, vol. 16(4), pages 540-556, December.

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