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Memory, market stability and the nonlinear cobweb theorem

Published online by Cambridge University Press:  17 February 2009

J. M. Gaffney  and
C. E. M. Pearce
J. M. Gaffney
Affiliation:
School of Applied Mathematics, The University of Adelaide, SA 5005, Australia; e-mail: [email protected] and [email protected].
C. E. M. Pearce
Affiliation:
School of Applied Mathematics, The University of Adelaide, SA 5005, Australia; e-mail: [email protected] and [email protected].
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Abstract

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Carlson has shown that if the predicted price in the linear cobweb model is taken as the average of all previous actual prices, then stability results independently of parameter values provided only that the demand–curve gradient is less than that of the supply curve. This result has subsequently been generalised by Manning and by Holmes and Manning. We investigate the robustness of their results.

Type
Research Article
Information
The ANZIAM Journal , Volume 45 , Issue 4 , April 2004 , pp. 547 - 555
Copyright
Copyright © Australian Mathematical Society 2004

References

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