Cobweb Chaos in Agricultural Markets: Simulation Results

抄録

This study augments the traditional linear cobweb model with lower and upper bounds for variations of output. Its purpose is to detect the relationship between the output constraints and the dynamics of the modified model. Due to the upper and lower bounds, a transitional function takes on a tilted z-profile having three piecewise segments with two turning points. It prevents the price (or quantity) dynamics from explosive oscillations. This study demonstrate, by presenting numerical examples, that the modified cobweb model can generate various dynamics ranging from stable periodic cycles to ergodic chaos if a product of the marginal propensity to consume and the marginal product is greater than unity.