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Replicator Dynamic Learning in Muth's Model of Price Movements


  • Joel Carton

    (Department of Economics, Florida International University)

  • Eran A. Guse

    (Department of Economics, West Virginia University)


We investigate the stability properties of Muth's model of price movements when agents choose a production level using replicator dynamic learning. It turns out that when there is a discrete set of possible production levels, possible stable states and stability conditions differ between adaptive learning and replicator dynamic learning. Furthermore, we show that the stability disparities between the two types of learning are due to the way asymptotic stability is defined under the replicator dynamics.

Suggested Citation

  • Joel Carton & Eran A. Guse, 2010. "Replicator Dynamic Learning in Muth's Model of Price Movements," Working Papers 10-18, Department of Economics, West Virginia University.
  • Handle: RePEc:wvu:wpaper:10-18

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    References listed on IDEAS

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    5. Jorgen W. Weibull, 1997. "Evolutionary Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262731215, July.
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    7. Evans, George W. & Honkapohja, Seppo & Honkapohja, Seppo, 1994. "Learning, convergence, and stability with multiple rational expectations equilibria," European Economic Review, Elsevier, vol. 38(5), pages 1071-1098, May.
    8. Drew Fudenberg & David K. Levine, 1998. "The Theory of Learning in Games," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061945, July.
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    11. Branch, William A. & McGough, Bruce, 2008. "Replicator dynamics in a Cobweb model with rationally heterogeneous expectations," Journal of Economic Behavior & Organization, Elsevier, vol. 65(2), pages 224-244, February.
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    Cited by:

    1. Michele Berardi, 2011. "Strategic interactions, incomplete information and learning," Centre for Growth and Business Cycle Research Discussion Paper Series 157, Economics, The Univeristy of Manchester.

    More about this item


    Asymptotic stability; replicator dynamics; cobweb model; E-stability; Nash equilibria.;

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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