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A Stochastic Cobweb Dynamical Model
Joint Authors
Michetti, Elisabetta
Mammana, Cristiana
Zirilli, Francesco
Brianzoni, Serena
Source
Discrete Dynamics in Nature and Society
Issue
Vol. 2008, Issue 2008 (31 Dec. 2008), pp.1-18, 18 p.
Publisher
Hindawi Publishing Corporation
Publication Date
2008-06-11
Country of Publication
Egypt
No. of Pages
18
Main Subjects
Abstract EN
We consider the dynamics of a stochastic cobweb model with linear demand and a backward-bending supply curve.
In our model, forward-looking expectations and backward-looking ones are assumed, in fact we assume that the representative agent chooses the backward predictor with probability q_,__0_q_1, and the forward predictor with probability (1−q), so that the expected price at time t is a random variable and consequently the dynamics describing the price evolution in time is governed by a stochastic dynamical system.
The dynamical system becomes a Markov process when the memory rate vanishes.
In particular, we study the Markov chain in the cases of discrete and continuous time.
Using a mixture of analytical tools and numerical methods, we show that, when prices take discrete values, the corresponding Markov chain is asymptotically stable.
In the case with continuous prices and nonnecessarily zero memory rate, numerical evidence of bounded price oscillations is shown.
The role of the memory rate is studied through numerical experiments, this study confirms the stabilizing effects of the presence of resistant memory.
American Psychological Association (APA)
Brianzoni, Serena& Mammana, Cristiana& Michetti, Elisabetta& Zirilli, Francesco. 2008. A Stochastic Cobweb Dynamical Model. Discrete Dynamics in Nature and Society،Vol. 2008, no. 2008, pp.1-18.
https://search.emarefa.net/detail/BIM-987831
Modern Language Association (MLA)
Brianzoni, Serena…[et al.]. A Stochastic Cobweb Dynamical Model. Discrete Dynamics in Nature and Society No. 2008 (2008), pp.1-18.
https://search.emarefa.net/detail/BIM-987831
American Medical Association (AMA)
Brianzoni, Serena& Mammana, Cristiana& Michetti, Elisabetta& Zirilli, Francesco. A Stochastic Cobweb Dynamical Model. Discrete Dynamics in Nature and Society. 2008. Vol. 2008, no. 2008, pp.1-18.
https://search.emarefa.net/detail/BIM-987831
Data Type
Journal Articles
Language
English
Notes
Includes bibliographical references
Record ID
BIM-987831