Skip to main content Accessibility help
×
Home

CONSISTENT EXPECTATIONS EQUILIBRIA AND COMPLEX DYNAMICS IN RENEWABLE RESOURCE MARKETS

  • Cars H. Hommes (a1) and J. Barkley Rosser, (a2)

Abstract

Price fluctuations under adaptive learning in renewable resource markets such as fisheries are examined. Optimal fishery management with logistic fish population growth implies a backward-bending, discounted supply curve for bioeconomic equilibrium sustained yield. Higher discount rates bend supply backward more to generate multiple steady-state rational expectations equilibria. Under bounded rationality, adaptive learning of a linear forecasting rule generates steady-state, two-cycle as well as chaotic consistent expectations equilibria, which are self-fulfilling in sample average and autocorrelations. The possibility of “learning to believe in chaos” is robust and even enhanced by dynamic noise.

Copyright

Corresponding author

Address correspondence to: Cars Hommes, Center for Nonlinear Dynamics in Economics and Finance (CeNDEF), Department of Economics and Econometrics, University of Amsterdam, Roetersstraat 11, NL-1018 WB Amsterdam, The Netherlands; e-mail:hommes@fee.uva.nl

Keywords

Metrics

Full text views

Total number of HTML views: 0
Total number of PDF views: 0 *
Loading metrics...

Abstract views

Total abstract views: 0 *
Loading metrics...

* Views captured on Cambridge Core between <date>. This data will be updated every 24 hours.

Usage data cannot currently be displayed