Hommes, C. (1991). Adaptive learning and roads to chaos: the case of the cobweb Economics Letters, 36(2):127--132.
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Affiliated author
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Publication year1991
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JournalEconomics Letters
We investigate the dynamics of the cobweb model with adaptive expectations, a linear demand curve, and a nonlinear, S-shaped, increasing supply curve. Both stable periodic and chaotic price behaviour can occur. We investigate, how the dynamics of the model depend on the parameters. Both infinitely many period doubling and period halving bifurcations can occur, when the demand curve is shifted upwards. The same result holds with respect to the expectations weight factor.